Table of Contents[i]

Abstract. 2

Introduction. 2

Framework. 5

Linear thinking. 6

Hierarchical thinking. 6

Dichotomous thinking. 7

Complex thinking. 7

Social decision-making. 8

Learned Helplessness and Mindsets. 10

The learning process. 10

Moral Dilemmas. 12

How to solve it. 14

Psycho-biological implications of staying passive. 19

Conclusion. 20

Literature. 22

 

 

Abstract

Business families have an implicit rule called Omertà, an oath of secrecy regarding family dealings, in organized crime families in southern Italy. Breaking it, results in pre-mature death of the “traitor”.

In this paper we examine the implications of not breaking the silence for the individual family member, the family and the family business at the example of a fictional business family. Family member-shareholders find themselves in various social dilemma situations that they need to solve via normalization in a peer-group setting to maintain economic solvency and preserve their own mental health. This paper should contribute to enterprise families finding more harmony (or synchronisation) which is a dynamic state of a social system that enables authentic (and efficient) collaboration[i] to preserve and perpetuate the legacy of the family enterprise.

Introduction

In this paper, we assume a dynastic family with 50 family members and 20 shareholders, 2 branches and 5 sub family systems. The patriarch is from branch 1 and the CEO of the business in the 3^rd generation, the shareholders range from the 3^rd to the 5^th generation.

In general, shareholders are part and parcel of good corporate governance and have statutory rights like the exoneration of the CEO and the advisory board after they have been informed about the progress the family business has made. Naturally, critically thinking shareholder ask questions to ascertain the economic validity and viability of the business performance measured by e.g., a return on capital employed:

Please note, that dividend payments do not play role in this context. Dividends are often at the core of disputes because the family is demanding dividend payments while the business is keen to retain earnings for investments, especially in the absence of access to financial markets.

Another KPI could be challenged by relating the ROCE to the risk that was taken to produce the ROCE and calculate the Sharp Ratio[ii] i.e., a ‘reward-to-variability ratio’:

This scrutiny corresponds to the Principal/Agency theory, which assumes that agents like the CEO cannot be trusted to act in the sole interest of the shareholders. Rather, the CEO is suspected to act in his or her own interest while managing the business, thus control is of the essence. This is contrary to the Stewardship Theory, where controls are not necessary because the CEO is the Steward who’s trusted to act in the interest of the shareholders running the business.

Many family businesses follow the Stewardship model where the patriarch is the CEO. Often, shareholders are denied active ownership of their wealth and inheritance and do not play a role in the corporate governance of the family business, nor should they in the view of the patriarch because being transparent as a CEO comes at a cost to him as a self-perceived steward. Answering questions and being under scrutiny may be perceived as curtailing the sense of agency and it also may be interpreted as mistrust by the family shareholders.

The Stewardship Model with exclusion of family members was favored and practiced for the past 100 years[iii]. Consequently, critical thinking, active participation of any form and contributions was neither encouraged nor invited which leads to mere legal co-ownership with the danger of entitled behaviours.

When legal business ownership is perceived as entitlement it becomes a burden for everyone, but when it is taken as responsibility it becomes a purpose[iv], which is benefical to everyone, including the patriarch and his legacy.

The shareholders of the next generation demand to be responsible and accountable shareholders and grew up in a pluralistic world with critical thinking that created financially literate shareholders who work(ed) in businesses e.g. M&A advisory and investment banking.

When the patriarch is from the predecessor generation, he’s formed boundaried belief-systems based on the Stewardship Theory which we can call a belief bubble.

Analogous, the next generation demands mental as well as legal co-ownership and has formed a belief-bubble based on the Principal/Agent theory in conjunction with the responsibility and accountability they carry as shareholders and care takers for the next generation.

In line with this approach, shareholders are deeming the Steward a de-facto Agent, leading to misunderstandings because of belief-bubble clashes. This leads to the buildup of tensions followed by tension releases. Tension releases are non-linear phenomenon which can create emotional hurts on both sides, especially during the acceleration phase.

Three factors can drive tension-buildups:

• Shareholders have a responsibility to look after how their capital is deployed, regardless of how it was acquired (e.g. inheritance)
• In a multigenerational family business, the shareholders are the custodians of the wealth which is borrowed from the next generations and will be held accountable for the outcome of their custody performance by the next generation.
• The patriarch perceives himself as steward and denies shareholders their role in corporate governance despite the responsibility and accountability they hold.

 

Illustration 1

The predevelopment phase between 1 and 4 can be interpreted as the initial condition X_0, followed by an acceleration phase from 5 (tipping point or critical threshold) to 13 and the stabilization phase from 14 onwards is a meta-stable state, where the system is temporarily stationary. The area under the curve is the sum of changes.

Individual psychodynamics and family dynamics can be severely distorted, and the business may lack efficient oversight, leading to underperformance and in extreme cases, bankruptcy with severe, negative implications for all stakeholders in the business, including the employees and their families.

In the following paragraphs, we explore the tensions arising between the responsible and accountable shareholder vs. the oppressive patriarch and what counter measures could be taken to release the tensions in an orderly manner for better outcomes for the business and for the associated social systems.

Framework

Our intra and interpersonal communication represents our behavioral patterns driven by emotion and cognitions embedded and fed by family values, cultural values and belief systems which are shaped by our experiences from which our mental model of the world is created.

The outcome of the socialization process of an individual is a subjective mental model of the world which determines how the individual perceives the world resp. how the individual responds to the world. In any social process, 2 or more different mental models of the world communicate with various degrees of overlap. Through the application of cognitive and emotional empathy, inquiry and active listening the overlap can be increased which is conducive to creating a shared reality and shared intentionality.

Children learn implicitly and explicitly through observation, imitation and reinforcement (reinforcement learning) from multiple agents in multiple social contexts, through intrapersonal communication and interpersonal communication.

On a micro level, the core family with the immediate care takers are the primary source of learning which also take influence over the child’s behavior through transgenerational epigenetics.

At the meso level are schools, religious institutions but also institutions the business family may have created.

The macro level describes the culture of the business family is embedded in the culture of the country the family originates from resp. lives in with all its social and cultural norms informed by history and traditions.

Micro patterns influence patterns on the meso and macro level which in turn influences patterns on the meso and micro level. The higher the level the greater the inertia to change, especially with ubiquitous but often dysfunctional traditional thinking styles[v].

However, revolutions attempt to change things on a macro level – including the push for change in business families that are often in suppressed by the top brass and by the psychological corsets of family members on a micro level.

Linear thinking

The linear thinking perspective is a belief, that a behavior, attitude, or action of an individual is mono- causal and will repeat regardless of changed circumstances in a socio-cultural or changes in the individual’s development stage. It’s a judgment-based assumptions, projecting, generalizing an experience from the past without further inquiry, creating a perceptual frame for future social reference and social processes on an intra- and interpersonal level by creating automatic thought patterns. Thus, generalizations often lead to systemic and internalized oppression. They instill dysfunctional beliefs in the self and in other persons, creating inner conflicts that are externalized at some point and limiting peoples intellectual, emotional, and spiritual growth. By definition, it denies non-linear evolutions.

Linear thinking is also leads to the assumption that every problem can be decomposed down and solved in its parts and reassembled to represent a solution to the problem at hand. The states of sub-systems  determine the composite state of the entire system S and vice versa.

This reductionist approach is the philosophical foundation of science[vi] today but it leads to many unintended consequences, including but not limited to – in social resp. moral decisions!

This problem can be alleviated through wholistic and complex thinking as alluded to below.

Hierarchical thinking

It starts with putting the self or others into superior or inferior positions, dividing the world in respect and disrespect valuing individual achievements greater than group achievements. It creates internalized privileges and entitlements, especially with over-regulation of the self, leading to narcissistic traits on one side or the down regulation leading to people pleasers, rescuers and finally victims which are also in the entitlement spectrum. It also leads to ingroup favoritism which becomes problematic when intergroup discrimination with symmetric perceptions morphs into inefficient social process outcomes such as nepotism and/or conflicts.

It also can lead to emotional hurt from belittlement and social rejection as we will discuss below.

Dichotomous thinking

The dichotomous mindset is judgmental resp. digital as it divides the world in right and wrong, in us vs. them. It is aligned with the hierarchical thinking style described above. The combination of both thinking styles is potent in favoring discriminatory behaviors, oppression, and marginalization of social process constituents.

All three thinking styles are the cultural foundations in western communities. They inhibit synchronization of belief-bubbles and hence the creation of a shared reality. Instead, these thinking styles are conducive to create information asymmetries and social conflicts. They block cognitive and emotional empathy in people and make social processes highly inefficient with negative implication for the individual, the entire social system and vice versa.

However, they are core to the perception of social information and the way people respond to social stimuli.

Complex thinking

Reality is a subjective conception which remains fragmented with thinking styles that are linear, dichotomous and hierarchical, conducive to conflict related to evaluations and judgements expressed in right and wrong, us and them. Holistic thinking opens a fuller and richer reality[vii].

The complex thinking style embraces the idea that the whole is more than the sum of its parts (Aristotle) and accepts the world as a complex dynamical system.

E.g. Our embodied cognitions based on perceptions of faces or ambiguous optical illusions relies holistic properties. Making meaning of stimuli we are exposed to is a systemic activity, driven by a sematic network linked by associations within a given context. These cognitions are based on concepts that cannot be broken down in meaningful concepts[viii] and are thus irreducible. The same applies to our thoughts and feelings and mental states resp. mental state transitions.

These systems can be interpreted as complex dynamics systems that are inherently non-linear, accepting multi-causality and the multilayered dynamics on micro-meso-macros levels, and multi-dimensional character of phenomena with its reinforcing and diminishing feed-back loops over many iterations to converge to the relative truth rather than to achieve the universal and absolute truth that doesn’t exist in the view of the author.

It allows for superpositions, i.e., it allows for multiple states of a system or situation present at the same time (diunital thinking [ix]) while weighing all options based on (quantum) probabilities. It entails reflections from various perspectives and the suspension of (immediate) judgement, presupposing an open mind and a growth mindset.

Complex thinking entails to switch thinking styles depending on context, thus linear, hierarchical or dichotomous thinking styles are not entirely obsolete but should not be the general and prevailing thinking styles that they are still today.

After all, true power comes from an understanding of the connection between seemingly disparate things, situations and people, not the primitive force of applying more strength (Taoism)[x].

We will encounter the concept of thinking styles throughout this paper.

Social decision-making

Social decision-making is a relational game that defines reality, which implies comparisons and evaluations (dichotomous thinking style). Social comparison with moral emotions and cognitions elicits emotional and cognitive processes that initiate adaption processes of intra- and inter-personal psychodynamical patterns.

Morality plays a significant role in social processes and social systems for context bound, social actions. It can be considered the degree of adherence to the social norms accepted by social agents of the same social system.

Humans’ actions take place in a socio-cultural context. It is the infrastructure in which social patterns emerge. This infrastructure is characterized by social norms which implicates moral repercussions based on judgements of adequacy of behaviors, i.e., evaluations and judgements of right and wrong (dichotomous thinking style) depending on complex interactions of intrapersonal emotions and cognitions as well as the complex interpersonal exchanges.

Moral emotions and cognitions are linked to the interest or welfare of others and are evoked by situations beyond the SELF and its interests. They encourage or inhibit behaviors depending on social acceptability, modulated by social actions[xi] and feedback loops.

Moral emotions include shame (one’s own attribution of reduced self-value and self-esteem upon violation of a moral norm after comparison between self – and others, comparison with own/others social standards), embarrassment (experienced when a social code is violated and exacerbated by public exposition), pride, envy and Schadenfreude, guilt (self-judgement, judgement by others guided by internal representation of values) as well as goal-driven social actions associated with moral emotions are e.g., affiliation, comfort, revenge, escape behaviors to prevent self-contempt. These patterns shape individual psychodynamics and behaviors as well as the dynamics of the social system on a higher level[xii], even if they do not exist on a deeper existential level as they are merely socially conditioned[xiii].

This corresponds to the aforementioned thinking styles (linear, hierarchical, dichotomous) that are used to navigate social spaces, to predict behaviors and to evaluate the accuracy of one’s prediction and to judge own and others’ behaviors. The anterior cingulate cortex in our brains is implicated in error detection and thus plays a decisive role in moral judgements.

Emotions play a pivotal role in morality according to the somatic marker hypothesis [Antonio Damasio]. Emotions are signals arising from the body that help regulate complex decision-making processes in conjunction with the brains’ executive functions, especially the ventro-medial pre-frontal cortex [vmPFC] which also holds goals we want to achieve. The ventromedial part of the prefrontal cortex is the control centre which mediates between the ventral striatum (processing the anticipation of rewards) and the amygdala. The vmPFC holds information about the context of the situation and can increase and decrease the activation levels in the amygdala and the ventral striatum.

This dyadic neuronal assembly of the ventral striatum and the amygdala is a sounding board creating visceral reactions to a stimulus which is either attractive or repulsive without further deliberation.

The rapid reaction center is the amygdala which is implicated in moral learning and in the response to social threats[xiv], such as the fear of being judged, punished and the fear of social rejection. The latter has been shown to elicit the insula, a neuronal structure that connects the brain with the body via the vagus nerve running through the spine) and detects physical pain in the body linked to physical injuries. Thus, social rejection is literally a hurtful event we try to avoid.

The amygdala contributes to automatic emotions of morally salient actions[xv]. It is implicated in the stress related activation of the sympathetic nervous system which drives the flight, fight and freeze responses to perceived threats and it downregulates cognitive processing capacities leading to cognitive control failures which leads to higher reactivity that favors conflicts in social processes.

Thus, moral emotions and cognitions play a functional role in regulating social behaviors as they are the creators and the police of behavioral boundaries for functional social systems. At the same time, they can inhibit necessary personal and social change as we discuss in the following paragraphs.

Learned Helplessness and Mindsets

It is a concept first introduced by Martin E. P. Seligman et.al.[xvi]. In an experimental setting, they exposed dogs to electric shocks. One set A was given the option to control their exposure by escaping, the other set B did not have the option to escape. When set B was given the option to escape, they remained and endured the electrical shocks. Seligman et. al.[xvii] demonstrated this effect was caused by the uncontrollability of the events, driven by cognitive and emotional processes.

In the human domain this is far more complex, and the outcomes can have severe implications in a business family setting.

The learning process

Learning is grounded in perception, which is one of the reasons why we create ontologies which help us to interpret the information we are exposed to. Ontic interpretations are based on our mental model of the world which is shaped during our lifetime based on experiences. It is the core psychological structure through which perceive, interpret and respond to the world driven by our cognitions and emotions.

Emotionally saliant events like childhood neglect, overparenting or other traumatic events like reoccurring social rejections are associated with learned helplessness.

The repeated exposure to situations that are perceived as being beyond any sense of control of a person engages them in a negative reinforcing feed-back-loop that programs people’s inability to make decisions, respond actively and to exhibit intentional and purposeful behaviors.

In the context of a business family, the learning of helplessness is supported by traditional thinking styles (linear, hierarchical, dichotomous), especially in an AGM setting: shareholders are denied their voice and sense of agency which creates the belief of reoccurring if not permanent powerlessness which corresponds to the belief that noting can be changed whatsoever.

A dangerous, reinforcing feed-back-loop through the confirmation-bias is set in motion, i.e., the belief of powerlessness is reinforced by this perceptual bias. The belief of powerlessness is true and evidenced with every event, while counterevidence is ignored or even rejected. Over time this can be combined with self-attributions, even though the event was demonstrably outside of the sphere of influence of the individual. Another outcome may be generalizations – the belief of powerlessness is affecting all areas of life (trans-situationality).

Learned helplessness involves the amygdala[xviii] that again, is implicated in threat and fear responses as well as in chronic and toxic stress, weighing on social intelligence and intellectual performance potentials.

As a result, many maladaptive behaviors can emerge such as: low sense of agency, passivity, avoidance behaviors, low risk appetite, procrastination, indecisiveness, self-doubt, low motivation and lack of effort, low self-esteem, victimization, resignation, worthlessness, high reactivity etc.

Learned helplessness is the root cause of social / generalized anxiety disorders and/or depression[xix]. It may also correspond to the Imposter Syndrome[xx] which is often linked to low self-esteem, anxiety and depression. It is a belief of inadequacy of their abilities and lack of ownership of their achievements in conjunction with the fear to be discovered and perceived as incompetent.

Another link on the back of the traditional thinking styles (linear, hierarchical, dichotomous) can be made to a Growth Mindset and Fixed Mindset[xxi]. The core belief of a fixed mindset is that behaviors driven by thinking and feeling patterns of the individual influenced by social contexts cannot be changed and specific outcomes are inevitable. This implicates the belief that making an effort does not carry a positive expectation value and any deficiencies must be hidden at all costs for the fear of self-judgement and the judgement of other. Mistakes are not seen as an opportunity to learn and avoidance behaviors, defensive attitudes, reactivity, and the feeling of constant threat are inefficient outcomes and major stressors for the individual with negative implications for social dynamics.

Learned helplessness can and must be unlearned by changing one’s mind-set to a Growth Mindset[xxii] and by start thinking wholistically and adopting a complex thinking style. The growth mind-set centers around the belief that change is possible through learning (e.g., by interpreting mistakes as a development opportunity), by embracing challenges and that effort has a positive pays-off.

Changing the mindset by influencing thinking and feeling patterns leads to more self-efficacy and allows to unlearn helplessness, which is a prerequisite for solving moral dilemmas, which in turn are strong inhibitors to change and to unlearn helplessness.

Learned helplessness, a fixed mind set, and the imposters syndrome are based on limiting beliefs that reduce psychological freedom degrees which is not conducive to solve moral dilemmas which we will discuss in the next section.

Moral Dilemmas

The business family are dilemmatic per-se[xxiii] as they have certain social norms on a macro level and social interactions on a micro level are characterized by linear, hierarchical, and dichotomous thinking across the three sub-systems (family, business, ownership) with implications for moral emotions and cognitions and implications for impermeable belief-bubbles that fail to synchronize.

It is a social drift for diversity in business families[xxiv] i.e., diversity in expectations, sub-system logics, generational divides with the previous generation clinging to a patriarchal approach enforcing homogeneity while the next generation demands pluralism which implies heterogeneity and purpose driven conducts and decisions.

For instance, when the business savvy 4^th generation believes the steward is mis-conducting him or herself by not acting in the best interest of the greater good of the company and the shareholders and challenges the situation driven by their motivation to perform as responsible and accountable custodians for the next generation, the steward is fending off the attempts to challenge him to protect his own sphere as he interprets these attempts an incompetent interference based on mistrust, which he does not deserve after all he’s done for the company.

The defense strategy is fear based, driven by a fixed mindset and traditional thinking styles, often with a sense of entitlement, harsh judgements and authoritarian force, assuming that everyone in the family has been conditioned as obedient people pleasers easy to contain by forceful actions and reactions including but not limited to belittlements and ignorance. To contain the fallout from these actions, the steward issues a non-disclosure decreet and commands that what family member-shareholders experience is normal in business families.

On one side, moral emotions like embarrassment, shame, and guilt are elicited in the family members; on the other side moral dilemmas are created since the motivation and desire to be responsible and accountable shareholders does not disappear as hoped by the steward would happen in response to his actions.

This creates several dilemmas for the responsible and accountable shareholders.

The first dilemma arises from the importance of speaking up as responsible and accountable shareholder versus the social norm of not speaking up. To solve this dilemma, it may be useful to normalize the experience by reaching out to peers which is a second dilemma: breaking the NDA decree.

Moral dilemmas have been researched by Greene et. al.[xxv]. In an experimental setting, participants are confronted with the situation to safe 5 people by diverting a deadly trolly running toward them by pulling a lever which inevitably will kill 1 person.

Illustration 2

 

The footbridge dilemma is similar in the sense that the agent stands on a footbridge over tracks with a training running towards 5 people tied to the tracks behind the footbridge. The agent can safe 5 people by pushing the second person on the footbridge which would stop the train.

 

Illustration 3

 

The question is what the agent decides to do. Killing people violates the moral code and the deontological decision would be to do nothing because the choice cannot be justified by the consequence, especially when the agent doesn’t pull a lever but needs to actively push someone to death hands-on. The associated emotion intensity of touching some one seems to exacerbate the negative connotation to push a person to death. The utilitarian decision would be to sacrifice one person to save 5 lives as the end justifies the means – a paraphrase of Niccolò Machiavelli.

Greene postulates that the deontological decision is very much driven by intuition, heuristics and emotional patterns (fast System I[xxvi] for structural responses) while the utilitarian decision requires more elaboration and deliberation. It is driven by cognitions (slow System II[xxvii] which is active in evaluation of System I and processes novelties with purposeful controlled reasoning), based on measured response times. However, it has been shown that emotions are involved in both possible choices – the deontological as well as in the utilitarian moral decision-making[xxviii]. System I is rather pervasive and it’s a fact that human reasoning frequently depends on System I rather than System II. This explains the many violations of normative criteria[xxix]. Thus, emotions influence moral decisions, even if they are utilitarian in nature.

In the context of annual general meeting of the family business, the dilemma is either to follow the deontological approach or the utilitarian approach which comes at a cost to the self, i.e., to be the responsible and accountable shareholder, speak up and kill one’s inner peace because of disrespecting the family code. Speaking up to ‘save’ the business for the greater good implicates the risk of emotional hurts, social rejection, as well as feelings of shame and guilt that the top brass tries to instill.

Naturally, this elicits inertia which needs to be overcome first which requires a considerable amount of deliberation resp. System II activity as System I is a significant and dominating force that drives behaviors and decision-making, but it is relative inflexible.

How to solve it

It is vital for the well-being of the family in a psychobiological and economic sense that family members do not succumb to learned helplessness with a fixed mind set and the risk of adopting the imposter syndrome. It is also important to release tensions in a neutral space rather than in the contentious business family space where uncontrolled, non-linear tension releases can cause severe damage to the mental health of family members which poses a risk to the social and financial capital of the family.

Everyone needs to learn, as it is the only viable responds to the only constant of life which is change. All must overcome and embrace resistance which allows us to learn to swim, if we don’t do it, we simply drown [xxx].

To learn to create more self-efficacy, open mindness and connectedness, we contribute to social efficacy and improve family dynamics. The desired outcomes are to lose handbrakes and get rid of limiting beliefs, unaccepted aspects of ourselves that trigger defense mechanism[xxxi] e.g., justifications, validations, excuses etc. It is pivotal that we raise awareness on a relational and contextual awareness and eliminate learned helplessness, the imposter syndrome and to adopt complex thinking and a Growth Mindset which implies psychological freedom degrees for the ability to make utilitarian decisions with confidence in conjunction with other systemic tools, such as personal reflection, self-awareness and perspective taking to gain a better understanding of the mental model of the world of self and others, the expectation carousel which is a collective reflection process to become aware of the various expectations and demands within a given context, the tetralemma tool which provides a number of dichotomous decision options: 1) decide for one option and against the alternative, 2) create new alternative and decide or 3) incorporate both options, 4) decide against both options or decide to stay neutral altogether because you cannot be bothered which makes this tool a penta-lemma. These systemic tools are aiming to open up mental space to deal with dilemmatic situations[xxxii]. These are all dichotomous thinking style approaches which can be combined with the design thinking process[xxxiii] which is a bottom-up, back to the drawing board technique that requires the complex thinking style.

To initiate change processes and work with these systemic tools it paramount to gain psychological freedom degrees which is the initial condition for personal psychological and emotional processing. That is the prerequisite for the initiation of social change processes.

Psychological freedom degrees can be created by normalization techniques.

Normalization is the process by which thoughts, behaviours, moods and experiences are compared and understood in terms of similar thoughts, behaviours, moods and experiences attributed to other individuals”[xxxiv]

Cognitive behavioral therapy [CBT], and neuro linguistic programming [NLP] use the method of normalization among other techniques to create a neutral space for tension release and self-development to achieve desired outcomes. In other words, it loosens the hand break with a wholistic approach.

The first step is interoception which is the first step to reflect and lean about the self, but if we looked into a mirror, we would learn different things about the self that we cannot learn solely from interoceptive analysis of our conscious experience[xxxv]. This mirror is represented by the peer-group.

On an eye-to eye level without hierarchies, the aim is to expand the conscious experience related to family dynamics through interoception resp. mutual reflection and raise contextual awareness as our meaning making processes are highly context dependent. It is also vital to understand the experience triggered by internal and external events through cognitive reappraisals of these experiences which is deemed most effective in emotion regulation.

Normalization strategies are instrumental for the endeavour as they modulate emotions, behaviours, and underlying psychobiological responses[xxxvi]. It helps individuals to see that they are not alone in experiencing certain feelings or thoughts, and this can enhance feelings of psychological safety, self-esteem, facilitate improved coping, and reduce stigmatisation rep. self-judgements that are expressed via moral cognitions and moral emotions. Normalisation can also be seen as an active element within group CBT as self-disclosing people can relate to one another within the group and see that other people experience similar problems[xxxvii]. Normalizing interventions are increasingly used in severe mental diseases and can have a relevant role in achieving adequate clinical outcomes[xxxviii].

This should be done in conjunction with making the experiences outside of our conscious awareness ‘conscious’ and to transform deducible information from incommunicable to communicable by creating a library of mapping affects to emotional words to label and express emotions which reduces their intensity[xxxix].

Affect labelling is a critical emotion regulation strategy that involves the anticipation, perception and acknowledgement of feelings based on interoception and reflection in order to label the unspecific affect patterns and categorize them with verbal descriptions[xl] This strategy is proven to activate the rvlPFC, reducing the neuronal activity of the amygdala[xli] and a rich emotional vocabulary helps to communicate emotions e.g., by giving emotional context and acknowledge emotions of others in social processes. Another proven ER strategy that activates the rvlPFC is cognitive reappraisal[xlii] or reframing by reflectively challenging current patterns of emotions and cognitions that may be maladaptive.

One can argue that normalization as described can be achieved within a peer-group in the family system to comply with the family NDA. However, this is counterproductive as it keeps everyone in an ‘Echo Chamber’, which is characterized by reinforcing feedback loops of the jointly acquired belief-bubbles via the confirmation bias and the constant representation of the same triggering stimuli. The exit from these detrimental feed-loops is normalisation in the context of a peer-group with constituents from external family members who are impartial and active listeners. This way, normalizing interventions change the emotional states of individuals which occur through the modulation of pathways related to fear perception such as the amygdala by deliberately involving the prefrontal cortex which is at the core of System II. In turn, System I is relieved by the activation of the para-sympathetic nervous system and System II can function largely uninhibited.

Normalization presupposes that all individuals speak up resp. learn to speak up which itself is a dilemma because it would help affected family members to process the experience and finally speak up in the family as responsible and accountable shareholder. But when everyone is doing it, it becomes ‘normal’, a first step to feeling safe.

This allows to share experiences with the peer-group and the conscious and productive processing of the experiences and a major contribution to creating higher EQ levels and widens the mental space for making conscious choices, i.e., become less reactive to adverse stimuli associated with relational patterns generated by family dynamics.

Not speaking up and not normalizing the experience is conducive to reactivity and creates a negative feed-back loop of shame and guilt and emotion suppression because of the desire to perform as responsible and accountable shareholder resp. to accumulate the emotional injuries that were inflicted by attempts to speak up with negative implications for the persons’ mental and physical well-being. But if everyone speaks up, it become abnormal to be silent. Peer pressure is on, but in a good way!

Normalizing the experiences would empower the person in general but also to perform as responsible and accountable shareholder for the greater good.

Normalization is essential as it supports the solution of moral dilemmas in social decision-making because it leads to utilitarian preferences and choices. This is foundational to solve the various moral dilemmas in a business family context. The normalization process must take place in a guided and psychological safe environment[xliii] with privacy guaranteed as it requires risk taking by the individual to gradually trust and opening up in a peer-group setting.

Trust can be acquired by revealing information about the SELF to others and learning from the feed-back of others to normalize experiences. To enhance the perception of the individual’s perception on others we can use a communication model called the JOHARI WINDOW MODEL[xliv]:

 

Peers initially meet in the upper left quadrant as problems, attitudes, behaviours, emotions etc. are familiar. Through ‘Feedback Socialisation’ over many iterations, the individuals of the group expand the area beyond its borders across all other quadrants, especially the quadrant at the lower right position: open communication reveals hidden patterns and create the utmost awareness levels needed to solve all dilemmas and perform as responsible and accountable shareholder which fosters the potential for a successful candidacy as successor.

The same template can be applied to parts integration which is an assisted interoception strategy widely used in NLP.

The participants will create more contextual awareness by self-and-other reflection and create a better understanding of how thoughts, emotions and contexts influence their own behaviour and the behaviour of others and thereby raising each other’s frequencies.

Thus, the Johari Window process is conducive to counteract linear, hierarchical, and dichotomous thinking as it fosters wholistic and complex thinking. A major advantage in solving social dilemmas. It is non-judgemental and multi-dimensional, multi-layered, taking into account reinforcing and diminishing feed-back loops with cognitive and emotional empathy, compassion and the understanding of other people’s intend (ToM), able to take the perceptual position of other people.

Wholistic thinking fosters better and richer awareness levels that create a better understanding, enriching the mental model of the world of the individual and eventually of the entire social system.

Psycho-biological implications of staying passive

The feeling of silent judging and open judging in an Echo-Chamber which inhibits communication with those who should be communicated with, leads to a subjective reality based on assumptions and false beliefs which is a fertile ground for hidden and open conflicts. This is to be seen conjunction with the fear of being judged, again a fact that leads to inauthentic behaviors. The resulting incongruency is often outside of conscious awareness and the feeling of lack of agency bears the danger of victimization. All this leads to a high emotional load resp. stress load.

So, the focus is socio-emotional stress which is specifically a System I activity that can be mediated by System II. Normally, stress is a short-term response to internal or external stimuli which helps us to overcome obstacles and it temporarily disrupts our homeostasis (i.e. the way our body remains on an even keel). It originates in the FEAR CENTRE (Amygdala)[xlv] as a response to signals we perceive as threat to our autonomy. Stress responses are driven by actual, historical respectively imagined social processes that leave us with unresolved conflicts or, when we are emotionally constipated and deny ourselves the completion of emotional cycles. Other socio-emotional stressor-examples are the fear of social rejection and social isolation or the fear of being judged by others when we appear to be vulnerable. Other typical stressors are the fear of failure and the fear of losing control! [xlvi]

In general, stress increases behavioral biases, in particular the self-protection bias. Stress reduces our capacity for patience, narrows our mind, reduces empathy and our ability to trust. This is a downregulation of the social engagement system.

Stress responses related to cognitive dissonant states lead to elevated and prolonged cortisol levels (among other neuropeptides like adrenaline) that are toxic. This cocktail of chemicals is wreaking havoc on the mind and body of an individual as our cells are turning experiences into biology on a cellular level[xlvii].

Chronically high stress levels lead to the collapse of the inner-self and permanent states of social anxiety, a hapless feeling of being out of control creating excessive fears, anxiety, worry, panic, dread, terror, burnout and depression, driven by a pathological sense of loss of control.

Interpersonal tensions and tension releases that are resulting in toxic, social stress accentuates expression of pro-and anti-inflammatory signaling molecules fostering inflammation-sensitive diseases, including atherosclerosis. Stress, especially when not transient, elicits adaptive and maladaptive changes in gene expression[xlviii] (epigenics) that are passed on to future generations (transgenerational epigenetics)[xlix]. It inhibits regenerative processes, and it impairs the immune system, which increases the risk of illnesses. High body tension changes the posture sub-optimally, which can affect joints. Elevated heartrates and increased blood-pressure puts the cardio-vascular system under strain. Heart diseases, heart attacks, strokes, inflammations, cancer and auto-immune diseases become more likely to occur. Without intervention, this negative feed-back loop of stress morphs into a destructive downward spiral, likely to end in severe illnesses and pre-mature death.

PTSD has been shown to grow the neuronal mass of the amygdala which makes individuals even more susceptible to stressors, even if the stimuli are perceived as minor stressors by neurotypical individuals.

Normalization helps to reduce stress levels and to regain a sense of agency that is vital for all social situations and for active, responsible and accountable shareholders that want to initiate change in corporate governance for more efficiency.

Conclusion

It is important to look at family wealth wholistically, considering individual-and-social wellbeing as well as financial aspects of the family business which is inextricably linked to good corporate governance of which shareholders are an integral part even if they have elected a supervisory board.

Responsible shareholders not only have the right but the duty to ask questions, voice their views and concerns regarding the business and exercise their rights to exonerate the management board and the supervisory board. This is essential for accountability as custodians for the next generations!

Oppression of this desire for agency for the purpose of responsibility and accountability ignores good governance principals and reduces the well-being of the family on socio-emotional level. Accepting this state of being is incongruent with the goal of multigenerational family legacy.

In absence of the top brass to open up and inviting shareholders’ participation in the corporate governance, family members need to reduce stress levels to create psychological freedom degrees i.e., to overcome learned helplessness and social dilemmas in their decision-making to become responsible, accountable shareholders and thus, worthy successors of the business.

To break Omertà is a chance to assess habits and traditions, to overcome the system drag and stimulate evolution. Normalization with external peers for ‘peer-development’ is an effective way to counteract learned helplessness and other limiting beliefs that reduce psychological freedom degrees fostering deontological choices while inhibiting utilitarian decisions.

 

 

Literature

 

[1] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[1]  Sharpe, W. F. (1966). “Mutual Fund Performance”. Journal of Business. 39 (S1): 119–138

[1] Kleve Heiko et. al. eds, Sociology of the Business Family, Springer, 2023

[1] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[1] Jun, Heesoon, Social Justice, Multicultural Counselling, and Practice, 3^rd ed, Springer, 2024

[1] Wojciechwski, Bartosz, W., Quantum Probability Theory, Psychology and Law, Routledge, 2024

[1] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[1] Bartosz W., Wojciechowski, Quantum Probability Theory, Psychology and Law, Routledge, 2024

[1] Jun, Heesoon, Social Justice, Multicultural Counselling, and Practice, 3^rd ed, Springer, 2024

[1] Tsao, Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[1] Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017

[1] Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017

[1] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[1] Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017

[1] Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017

[1]  Seligman, Martin E.P. et.al., Learned Helplessness: Theory and Evidence, Journal of Experimental Psychology, 1976

[1] Seligman, Martin E.P. et.al., Learned Helplessness: Theory and Evidence, Journal of Experimental Psychology, 1976

[1] Seligman, Martin E.P. et.al., Learned Helplessness at Fifty: Insights From Neuroscience, American Psychological Association, 2016

[1] Seligman, Martin E.P. et.al., Learned Helplessness: Theory and Evidence, Journal of Experimental Psychology, 1976

[1] Clance, P. R., & Imes S. A. , he imposter phenomenon in high achieving women: Dynamics and therapeutic intervention. Psychotherapy: Theory, Research & Practice, 15(3), 241–247. , 1978

[1] Dweck, Carol Sorich, Stanford University, 2015

[1] Dweck, Carol Sorich, Stanford University, 2015

[1] Arnold Thersa et. al:  Within a mesh of expectations: Dealing with Dilemmas in business families using systemic tools from family coaching

[1] Arnold Thersa et. al:  Within a mesh of expectations: Dealing with Dilemmas in business families using systemic tools from family coaching

[1] Greene, JD Nystrom LE, Engell AD, Darley JM, Cohen JD, The neural basis of cognitive conflict and control in moral judgement. Neuron. 2004:44

[1] Kahneman Daniel, Thinking Fast and Slow, 2011

[1] Kahneman Daniel, Thinking Fast and Slow, 2011

[1] Manfrinati Andrea et.al., Moral dilemmas and moral principles: When emotion and cognition unite, Cognition & Emotion, vol. 27, issue 7, 2013

[1] Wojciechwski, Bartosz, W., Quantum Probability Theory, Psychology and Law, Routledge, 2024

[1] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[1] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[1] Arnold Thersa et. al:  Within a mesh of expectations: Dealing with Dilemmas in business families using systemic tools from family coaching

[1] The Neuroscience of Team Collaboration During Design Thinking Event in Naturalistic Settings, Naama Mayseless et.al., in Design Thinking Research, Investigating Design Team Performance, Christoph Meinel et.al., Springer, 2020

[1] Kingdon DG, Turkington D. Psychoeducation and normalization. In: Cognitive therapy of schizophrenia. New York, NY: The Guilford Press; 2005. p. 83–95.

[1] Danko D. Georgiev, Quantum Information and Consciousness, CRC Press, 2019

[1] Bersani, F. S., & Delle Chiaie, R. (2021). The END method: Normalization. In M. Biondi, M. Pasquini, & L. Tarsitani (Eds.), Empathy, normalization and de-escalation: Management of the agitated patient in emergency and critical situations (pp. 57–64). Springer Nature Switzerland AG.

[1] Dudley Robert et.al., Techniques in Cognitive Behavioural Therapy: Using Normalising in Schizophrenia, Tidsskrift for Norsk Psykologfoeining, Psykologi, 2007

[1] Bersani, F. S., & Delle Chiaie, R. (2021). The END method: Normalization. In M. Biondi, M. Pasquini, & L. Tarsitani (Eds.), Empathy, normalization and de-escalation: Management of the agitated patient in emergency and critical situations (pp. 57–64). Springer Nature Switzerland AG.

[1] Torre, J.B., Liebermann, M.D, Putting feelings into words: Affect labelling as implicit emotion regulation. Emotion Review, Vol 10, No 2, pp 116-124, 2018

[1] How Emotions Are Made: The Secret Life of the Brain, Lisa Feldmann Barrett, Pan, 2016

[1] Modulating the Social and Affective Brain with Transcranial Stimulation Techniques, Gabriel Rego et.al., in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023

[1] Modulating the Social and Affective Brain with Transcranial Stimulation Techniques, Gabriel Rego et.al., in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023

[1] Edmonson, Amy et.al., Psychological Safety Comes of Age: Observed Themes in an Established Literature

[1]  Luft, J.; Ingham, H. (1955). “The Johari window, a graphic model of interpersonal awareness”. Proceedings of the Western Training Laboratory in Group Development.

[1] Salposky, M. Robert, Behave, Penguin Random House, 2017

[1] von Eynern, Dominik, Sommavilla, Doris, Stonewalling, Family Hippocampus, 2021

[1]Lipton Bruce H., The Biology of Belief, Hay House, 2015

[1] Sabban L. Esther et. al., Stress-triggered activation of gene expression in cat who can be impartial listelaminergic systems: dynamics of transcriptional events, Trends in Neuroscience, 2001

[1] Lipton Bruce H., The Biology of Belief, Hay House, 2015

[i] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[ii]  Sharpe, W. F. (1966). “Mutual Fund Performance”. Journal of Business. 39 (S1): 119–138

[iii] Kleve Heiko et. al. eds, Sociology of the Business Family, Springer, 2023

[iv] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[v] Jun, Heesoon, Social Justice, Multicultural Counselling, and Practice, 3^rd ed, Springer, 2024

[vi] Wojciechwski, Bartosz, W., Quantum Probability Theory, Psychology and Law, Routledge, 2024

[vii] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[viii] Bartosz W., Wojciechowski, Quantum Probability Theory, Psychology and Law, Routledge, 2024

[ix] Jun, Heesoon, Social Justice, Multicultural Counselling, and Practice, 3^rd ed, Springer, 2024

[x] Tsao, Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[xi] Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017

[xii] Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017

[xiii] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[xiv] Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017

[xv] Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017

[xvi]  Seligman, Martin E.P. et.al., Learned Helplessness: Theory and Evidence, Journal of Experimental Psychology, 1976

[xvii] Seligman, Martin E.P. et.al., Learned Helplessness: Theory and Evidence, Journal of Experimental Psychology, 1976

[xviii] Seligman, Martin E.P. et.al., Learned Helplessness at Fifty: Insights From Neuroscience, American Psychological Association, 2016

[xix] Seligman, Martin E.P. et.al., Learned Helplessness: Theory and Evidence, Journal of Experimental Psychology, 1976

[xx] Clance, P. R., & Imes S. A. , he imposter phenomenon in high achieving women: Dynamics and therapeutic intervention. Psychotherapy: Theory, Research & Practice, 15(3), 241–247. , 1978

[xxi] Dweck, Carol Sorich, Stanford University, 2015

[xxii] Dweck, Carol Sorich, Stanford University, 2015

[xxiii] Arnold Thersa et. al:  Within a mesh of expectations: Dealing with Dilemmas in business families using systemic tools from family coaching

[xxiv] Arnold Thersa et. al:  Within a mesh of expectations: Dealing with Dilemmas in business families using systemic tools from family coaching

[xxv] Greene, JD Nystrom LE, Engell AD, Darley JM, Cohen JD, The neural basis of cognitive conflict and control in moral judgement. Neuron. 2004:44

[xxvi] Kahneman Daniel, Thinking Fast and Slow, 2011

[xxvii] Kahneman Daniel, Thinking Fast and Slow, 2011

[xxviii] Manfrinati Andrea et.al., Moral dilemmas and moral principles: When emotion and cognition unite, Cognition & Emotion, vol. 27, issue 7, 2013

[xxix] Wojciechwski, Bartosz, W., Quantum Probability Theory, Psychology and Law, Routledge, 2024

[xxx] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[xxxi] Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019

[xxxii] Arnold Thersa et. al:  Within a mesh of expectations: Dealing with Dilemmas in business families using systemic tools from family coaching

[xxxiii] The Neuroscience of Team Collaboration During Design Thinking Event in Naturalistic Settings, Naama Mayseless et.al., in Design Thinking Research, Investigating Design Team Performance, Christoph Meinel et.al., Springer, 2020

[xxxiv] Kingdon DG, Turkington D. Psychoeducation and normalization. In: Cognitive therapy of schizophrenia. New York, NY: The Guilford Press; 2005. p. 83–95.

[xxxv] Danko D. Georgiev, Quantum Information and Consciousness, CRC Press, 2019

[xxxvi] Bersani, F. S., & Delle Chiaie, R. (2021). The END method: Normalization. In M. Biondi, M. Pasquini, & L. Tarsitani (Eds.), Empathy, normalization and de-escalation: Management of the agitated patient in emergency and critical situations (pp. 57–64). Springer Nature Switzerland AG.

[xxxvii] Dudley Robert et.al., Techniques in Cognitive Behavioural Therapy: Using Normalising in Schizophrenia, Tidsskrift for Norsk Psykologfoeining, Psykologi, 2007

[xxxviii] Bersani, F. S., & Delle Chiaie, R. (2021). The END method: Normalization. In M. Biondi, M. Pasquini, & L. Tarsitani (Eds.), Empathy, normalization and de-escalation: Management of the agitated patient in emergency and critical situations (pp. 57–64). Springer Nature Switzerland AG.

[xxxix] Torre, J.B., Liebermann, M.D, Putting feelings into words: Affect labelling as implicit emotion regulation. Emotion Review, Vol 10, No 2, pp 116-124, 2018

[xl] How Emotions Are Made: The Secret Life of the Brain, Lisa Feldmann Barrett, Pan, 2016

[xli] Modulating the Social and Affective Brain with Transcranial Stimulation Techniques, Gabriel Rego et.al., in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023

[xlii] Modulating the Social and Affective Brain with Transcranial Stimulation Techniques, Gabriel Rego et.al., in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023

[xliii] Edmonson, Amy et.al., Psychological Safety Comes of Age: Observed Themes in an Established Literature

[xliv]  Luft, J.; Ingham, H. (1955). “The Johari window, a graphic model of interpersonal awareness”. Proceedings of the Western Training Laboratory in Group Development.

[xlv] Salposky, M. Robert, Behave, Penguin Random House, 2017

[xlvi] von Eynern, Dominik, Sommavilla, Doris, Stonewalling, Family Hippocampus, 2021

[xlvii]Lipton Bruce H., The Biology of Belief, Hay House, 2015

[xlviii] Sabban L. Esther et. al., Stress-triggered activation of gene expression in cat who can be impartial listelaminergic systems: dynamics of transcriptional events, Trends in Neuroscience, 2001

[xlix] Lipton Bruce H., The Biology of Belief, Hay House, 2015

Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019
Sharpe, W. F. (1966). “Mutual Fund Performance”. Journal of Business. 39 (S1): 119–138
Kleve Heiko et. al. eds, Sociology of the Business Family, Springer, 2023
Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019
Jun, Heesoon, Social Justice, Multicultural Counselling, and Practice, 3rd ed, Springer, 2024
Wojciechwski, Bartosz, W., Quantum Probability Theory, Psychology and Law, Routledge, 2024
Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019
Bartosz W., Wojciechowski, Quantum Probability Theory, Psychology and Law, Routledge, 2024
Jun, Heesoon, Social Justice, Multicultural Counselling, and Practice, 3rd ed, Springer, 2024
Tsao, Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019
Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017
Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017
Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019
Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017
Ibanez Augustin et.al. eds, Neuroscience and social science, chapter: Moral Cognitions and Moral Emotions, Springer, 2017
Seligman, Martin E.P. et.al., Learned Helplessness: Theory and Evidence, Journal of Experimental Psychology, 1976
Seligman, Martin E.P. et.al., Learned Helplessness: Theory and Evidence, Journal of Experimental Psychology, 1976
Seligman, Martin E.P. et.al., Learned Helplessness at Fifty: Insights From Neuroscience, American Psychological Association, 2016
Seligman, Martin E.P. et.al., Learned Helplessness: Theory and Evidence, Journal of Experimental Psychology, 1976
Clance, P. R., & Imes S. A. , he imposter phenomenon in high achieving women: Dynamics and therapeutic intervention. Psychotherapy: Theory, Research & Practice, 15(3), 241–247. , 1978
Dweck, Carol Sorich, Stanford University, 2015
Dweck, Carol Sorich, Stanford University, 2015
Arnold Thersa et. al: Within a mesh of expectations: Dealing with Dilemmas in business families using systemic tools from family coaching
Arnold Thersa et. al: Within a mesh of expectations: Dealing with Dilemmas in business families using systemic tools from family coaching
Greene, JD Nystrom LE, Engell AD, Darley JM, Cohen JD, The neural basis of cognitive conflict and control in moral judgement. Neuron. 2004:44
Kahneman Daniel, Thinking Fast and Slow, 2011
Kahneman Daniel, Thinking Fast and Slow, 2011
Manfrinati Andrea et.al., Moral dilemmas and moral principles: When emotion and cognition unite, Cognition & Emotion, vol. 27, issue 7, 2013
Wojciechwski, Bartosz, W., Quantum Probability Theory, Psychology and Law, Routledge, 2024
Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019
Tsao Chavalit Frederick et.al., Quantum Leadership, Stanford Business Books, 2019
Arnold Thersa et. al: Within a mesh of expectations: Dealing with Dilemmas in business families using systemic tools from family coaching
The Neuroscience of Team Collaboration During Design Thinking Event in Naturalistic Settings, Naama Mayseless et.al., in Design Thinking Research, Investigating Design Team Performance, Christoph Meinel et.al., Springer, 2020
Kingdon DG, Turkington D. Psychoeducation and normalization. In: Cognitive therapy of schizophrenia. New York, NY: The Guilford Press; 2005. p. 83–95.
Danko D. Georgiev, Quantum Information and Consciousness, CRC Press, 2019
Bersani, F. S., & Delle Chiaie, R. (2021). The END method: Normalization. In M. Biondi, M. Pasquini, & L. Tarsitani (Eds.), Empathy, normalization and de-escalation: Management of the agitated patient in emergency and critical situations (pp. 57–64). Springer Nature Switzerland AG.
Dudley Robert et.al., Techniques in Cognitive Behavioural Therapy: Using Normalising in Schizophrenia, Tidsskrift for Norsk Psykologfoeining, Psykologi, 2007
Bersani, F. S., & Delle Chiaie, R. (2021). The END method: Normalization. In M. Biondi, M. Pasquini, & L. Tarsitani (Eds.), Empathy, normalization and de-escalation: Management of the agitated patient in emergency and critical situations (pp. 57–64). Springer Nature Switzerland AG.
Torre, J.B., Liebermann, M.D, Putting feelings into words: Affect labelling as implicit emotion regulation. Emotion Review, Vol 10, No 2, pp 116-124, 2018
How Emotions Are Made: The Secret Life of the Brain, Lisa Feldmann Barrett, Pan, 2016
Modulating the Social and Affective Brain with Transcranial Stimulation Techniques, Gabriel Rego et.al., in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
Modulating the Social and Affective Brain with Transcranial Stimulation Techniques, Gabriel Rego et.al., in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
Edmonson, Amy et.al., Psychological Safety Comes of Age: Observed Themes in an Established Literature
Luft, J.; Ingham, H. (1955). “The Johari window, a graphic model of interpersonal awareness”. Proceedings of the Western Training Laboratory in Group Development.
Salposky, M. Robert, Behave, Penguin Random House, 2017
von Eynern, Dominik, Sommavilla, Doris, Stonewalling, Family Hippocampus, 2021
Lipton Bruce H., The Biology of Belief, Hay House, 2015
Sabban L. Esther et. al., Stress-triggered activation of gene expression in cat who can be impartial listelaminergic systems: dynamics of transcriptional events, Trends in Neuroscience, 2001
Lipton Bruce H., The Biology of Belief, Hay House, 2015

 

 

 

 

 

 

 

 

_________________________________________________________________________________________________________________

ⁱDisclaimer: While we have made every attempt to ensure that the information contained in this concept paper has been obtained from reliable sources, Family Hippocampus is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability, and fitness for a particular purpose. In no event will Family Hippocampus, its related partnerships or corporations, or the partners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this in this concept paper or for any consequential, special, or similar damages, even if advised of the possibility of such damages.

 

Table of Contents

Abstract.2

Introduction.2

Psychological Safety.3

Hallmarks of Psychological Safety – the more the better.4

Coexistence of PSij+,PSij.9

Social understanding.11

The Theory of Mind.15

Emotions.17

Emotional signalling and reading.18

Interpersonal connection at a neural level.22

Trust.23

Structural dynamics.24

Triadic Brain.25

Navigating the triadic decision-making model.28

Framing.28

Emotion Regulation.31

Emotion regulation methods.32

Interpersonal emotion requlation scheme.34

The Stress-Performance Curve.35

The PS transformaiton – What does it change in family
dynamics?.37Summary.40

Conclusion.40

Outlook.41

Abstract

The level of team psychological safety within companies and its impact on team performance is researched in companies. The concept was formulated by Edgar Schein, is researched intensely by Amy Edmondson and lately by Anna-Christina Leisin¹.

In this paper, we look at the role of psychological safety in business families, the implications of its absence from a behavioural and neuroscientific angle.

Introduction

Family enterprises have the added complexity of the family system, which is the backbone of the business. By the same token, it cancontribute to the erosion of socioemotional and financial wealth of the entire family enterprise.

The next generation often needs to fight the inertia of the current or even previous generation to collaborate and accept valuable input derived from societal and cultural evolutions which require the adaption of the business model.

A family enterprise needs strong and responsible owners who take charge, are responsible and accountable with shared visions and goals that can contribute to the transgenerational successes of the family enterprise and the legacy with high levels of psychological (mental) ownership².

But a lack of Intergenerational communication, the failure to listening to what the next generation has to offer and to contribute are perceived as social rejections. It leads to false assumptions that are likely to frustrate expectations as well as it frustrates the need for ‘love & belonging’ by feeling heard and the permission to contribute.

This systematic encouragement for disengagement stems from and fuels the misinterpreted humility to stay away from active ownership and leadership roles, creating vacuums – passive owners without a true sense of stewardship that can become the Achilles heel of the family enterprise³ as it favours entitlements which are especially problematic in control and assets transitions (i.e., successions).

It feels like the family enterprise should be protected from its owners instead of connecting the owners with the family enterprise to nurture active ownership instead of patronizing and ignoring owners, which induces divisions and indifference because ‘speaking up’ is costly in a socioemotional sense

1 Revisiting Team Psychological Safety at Work: A Case Study Approach to Its Dimensions, Intergroup Variations, and Influencing Factors,
Anna-Christina Leisin, Dissertation, 2021
2 Enabling Next Generation Legacies, Peter Jaskiewicz, Sabine B. Rau et. al., Family Enterprise Knowledge Hub Publishing, 2021
3
Enabling Next Generation Legacies, Peter Jaskiewicz, Sabine B. Rau et. al., Family Enterprise Knowledge Hub Publishing, 2021

 

Despite the importance to nurture active ownership in a bid to not compromise the socioemotional and financial wealth of the family and family enterprise, the strategic cultivation of active ownership rarely exists⁴ in business families.

Scholars and practitioners suggest that active ownership should be fostered by instilling competencies related to technical knowledge about the idiosyncrasies of the business and the markets, sector- and wider economy, but also about social competencies relating to leadership and acceptance within the family system and the business system which plays a pivotal role in successful successions.

The training of social competencies needs to start way earlier and must include all generations, not just the next generation to create a culture of mutual sponsorship with the creation of a psychological safe space at the core.

Psychological Safety

In a psychological safe space, agents don’t feel the need to exhibit a self-protection bias and have a shared belief that it is safe to take socioemotional risks to communicate freely and authentically without the fear of repercussions in response to their communication. Thus, creativity can flow freely, and even contentious issues of concern can be discussed with positive outcomes (productive conflict) that emerge from the social interaction.

It is the prerequisite to explore and exploit neurodiversity in a group of agents for generative collaboration and the genesis of collective intelligence, producing outcomes that are greater than the sum of its parts could achieve.

Thus, psychological safety is an indispensable infrastructure necessary for the dynamical emergence of higher-order and irreducible functional social units to perform complex tasks with social system efficacy. A psychological safe space is vital to prevent social systems from over-synchronization that manifests itself in group-thinking, a dangerous reinforcing feedback loop with peer pressure, echo chamber, and confirmation bias effects on a group level without constructive criticism or different outside perspectives. This reduction in collective intelligence and pluralism fosters polarization.

The level of psychological safety can be seen in the communication style. If it is cautious, inauthentic, or even propagandistic, it indicates poor health of the organization⁵.

 

⁴Enabling Next Generation Legacies, Peter Jaskiewicz, Sabine B. Rau et. al., Family Enterprise Knowledge Hub Publishing, 2021
⁵Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022

 

We would  add the degree of information asymmetry, tacit or open conflict and the degree of non-generative or
even degenerative dialogues.

More specifically, psychological safety reduces information asymmetry, allows embracing complexity, and is conducive to creative problem solutions. It lifts collective, generative performance potentials, especially when problems are fast-paced and ‘wicked’ due to a VUCA impact, demanding high levels of social system efficacy and agility.

The channel capacity and signal quality described by Claude Shannon’s information theory increases, i.e., the signal strength resp. bandwidth increases, the noise units decrease, making communication and thus, coordination efficient. High channel capacity is fostering the alignment of various mental models of the world resp. the subjective realities present in the social system, which in turn fosters channel capacity as we discussed in ‘Synchronicity’⁶.

Hallmarks of psychological Safety – the more the better?

Agents who exhibit behaviours conducive to creating a psychological safe space are driven by significantly high levels of emotional intelligence [EQ] which includes self-awareness and efficacy, a profound understanding of emotional processing and emotional vocabular as well as social intelligence [SQ] pertaining to the understanding of the emotions of others (emotional empathy) and mentalizing their states (cognitive empathy). They are acting from a place of abundance with a flexible growth-mindset rather than a place of scarcity with limited self-efficacy and a fixed and soldier mindset.

⁶https://family-hippocampus.com/synchronicity-the-importance-to-synchronize-social-systems/

Table 1⁷ summarizes EQ and SQ properties that are PS_i⁺_j and thus conducive to creating a psychological safety applicable to all agents and especially for senior members of the social system:

While these traits are positive forces to create a psychological safe space, counter forces will be active as social agents are resistant to change and introducing the concept of psychological safety is unlikely to be a linear process. Equation 1 formalises a psychological safe space which is a social construct of the dyad i and j with the psychological safety state variable 𝜓:

\psi = f(PS_{ij}^+, PS_{ij}^-)

With:

 

\frac{\partial\psi}{\partial PS_{ij}} > 0, \quad \frac{\partial\psi}{\partial PS_{ij}} < 0

</pThe prime task for leaders is to promote the synchronization of social systems into functional units of higher order. In case of asymmetric seniority levels with high social influence e.g., i > j, i needs to be the first mover in initiating 𝜓 which must be reciprocated by j for the emergence of 𝜓.

This resembles a leadership-follower model. It is an intentional social interaction whereby the leader initiates the social process, sets the rhythm and the follower tunes in, influencing the frequency and amplitude of this social oscillation which is only possible through social cognition and feed-back loops.

⁷https://hbr.org/2017/02/emotional-intelligence-has-12-elements-which-do-you-need-to-workon?utm_medium=social&utm_campaign=hbr&utm_source=LinkedIn&tpcc=orgsocial_edit

Psychological Safety| 4 September 2023

 

The quality of the social process or social oscillation depends on how the protagonists act

PS \frac{+}{ij}

and react PS \frac{+}{ji}
 

 

We list some PS \frac{+}{ij} identified by Amy Edmondson, Anna-Catherina Leisin⁸ and the author:
1. Holding space for another person by proactive, genuine curiosity and interest in another person’s state of being and concerns
2. Joining another person in his or her mental model of the world
3. Proactively seeking input
4. Appreciation the contribution of others
5. Active open mindset and challenging one’s biases, beliefs and assumptions
6. Learning orientation (growth mindset) rather than performance orientation
7. Active listening by suspending judgement and solution-processes
while listening
8. Inquiring and questioning with epistemological rationality
9. Demonstrating approachability, empathy, and compassion
10. Respect with eye-level discussions suspending hierarchical patterns
11. Sense of collective responsibility over the assignment of individual responsibility
12. Inclusiveness, familiarity, accessibility, seeking mental and physical proximity
13. Fostering cohesion and sense of togetherness
14. Accountability and vulnerability, admitting failure and knowledge deficits
15. Encouragement for self-forgiveness and to forgive others
16. Replacing control compulsion with trust
17. Suspending micromanagement with macro management with trust, delegation and providing a sense of agency
18. Competency, integrity, consistency, reliability \rightarrow\hspace{-0.55em}\rightarrow \rightarrow\hspace{-0.55em}\rightarrow

trustworthy
19. Clarity about vison, mission, goals, and roles (functional attractors)
20. Constructive attitude/feedback
21. Solution-oriented behaviours
22. …

 

⁸ Revisiting Team Psychological Safety at Work: A Case Study
Approach to Its Dimensions, Intergroup Variations, and Influencing Factors, Anna-Christina Leisin, Dissertation, 2021

Psychological Safety| 4 September 2023

Conversely, a negative item list can be construed that are exhibited by leaders or in response to the introduction of psychological safety through leadership:

PS \frac{+}{ij}
:
1. Dismissing and ignoring other people’s concerns, approaches to contribute by shutting and shouting them down
2. Ambiguous communication
3. Ambiguity about clarity, vison, mission, goal, and roles (no or chaotic attractor)
4. Performance orientation
5. Deflecting responsibilities, not being accountable
6. Blaming others
7. Exclusion of others (social rejection)
8. Not admitting failures
9. No willingness to learn (fixed mind set)
10. Pretending to know everything
11. Reframing other people’s experience (phenomenologically)
12. Treating other people with disrespect and ignorance
13. Cutting them short, talking over them
14. Aloofness, entitled behaviours
15. Narcissism (introverted, extroverted)
16. Not appearing vulnerable
17. Defensive (soldier mind-set)
18. Underappreciative of others
19. Superficial, meaningless behavioural patterns
20. Inaccessibility, not reachable or approachable
21. Inhibiting team communication
22. Control and command, depriving people of sense of agency
23. Lack of competency, integrity, consistency, reliability ⇏ trustworthy
24. …

We can see some

PS_{ij}^-  patterns that have been mentioned in the introduction section and the list can go on with examples that we have experienced in the context of family dynamics. PS patterns PS \frac{+}{ij}are driven by social skills i as well as j must possess or acquire

 

Psychological Safety| 4 September 2023

 

An optimal level of psychological capital [PsyCap] ⁹ of the protagonists is supportive of creating psychological safety because of transmissive positive emotions [PS⁺]. We can define PsyCap as function of emotional intelligence [EQ], social intelligence [SQ] and intellectual intelligence [IQ] which leads to an irreducible core construct of higher order emerging from the levels of 4 dimensions¹⁰: (1) optimism, i.e., making positive attributions across the time continuum, (2) hope, a motivational state derived from grit, perceived and successful agency, good stress management, failure acceptance, self-forgiveness, gratitude, (3) resilience resp. antifragility with a high tolerance for risk and uncertainty, nurtured by the belief that life is meaningful in combination with a high degree of (4) self-efficacy, i.e., the deep trust resp. confidence in one’s competencies on a cognitive level (IQ) and on a socio-emotional level( EQ, SQ) to execute and master challenges effectively.
Equation 1.1

𝜓 = 𝑓𝑖(𝐸𝑄, 𝑆𝑄,𝐼𝑄) ≅ 𝑓𝑗(𝐸𝑄, 𝑆𝑄,𝐼𝑄)

A psychological safe space can emerge when the levels of psychological capital of 2 or more agents are congruent.

That is, more PS^{+}

patterns in frequency and intensity must be exhibit than PS^{-} . Incongruent patterns must be synchronized in a way that deficits of i can be compensated by competencies j possesses e.g., PsyCap.

If agent j exhibits a unit of PS_{j}^{-}  , the agent i exhibits one or more units of PS_{i}^{+}  to create 𝜓 credits which is dependent on the emotional intelligence (EQ) of the protagonists, the social intelligence (SQ) and to a lesser degree, the intellectual intelligence (IQ). Conversely, 𝜓 and every behavioural unit PS \frac{+}{ij}  influences {𝐸𝑄, 𝑆𝑄,𝐼𝑄}

It is a dynamical system between the micro level i.e., patterns of social understanding driven by {𝐸𝑄, 𝑆𝑄,𝐼𝑄} operationalized through sensory perception, interpretation pertaining to the identification of mental and emotional states (social cognition) and how these sates evolve in accordance with the perception of context (macro level) rep. how the macro-level influences the micro level and vice versa.
Equation 1.2
\psi_{t+1} = f(\psi_{t}, PS_{t,ij} \pm)

⁹ Comparison of the Psychological Capital of Founders and Their Employed Top Management, Marcus Heidbrink et.al., Journal of Psychology and Clinical Psychiatry, 2017
¹⁰ Comparison of the Psychological Capital of Founders and Their Employed Top Management, Marcus Heidbrink et.al., Journal of Psychology and Clinical Psychiatry, 2017

 

The individuals learn from each interaction on a local level PS \frac{+}{ij}   and global level 𝜓. Local and global level are in a reflexive relationship.

For psychological safety to emerge, equation 1.2 must be satisfied:
\psi_{t+1} > \psi_{t}
The question is, if a monotonous increasing and infinite level of psychological safety is realistic resp. healthy for a social system.

Coexistence ofPS \frac{+}{ij} , PS \frac{-}{ij}

 

Equation 1.4

\psi_{t+1} = \psi_{t} \delta(1 - \psi_{t})

• 𝜓 = [0,1]: degree of psychological safety by PS \frac{+}{ij}
  behavioral patterns
• 𝛿: growth rate of  PS \frac{+}{ij} units (integration force)
• (1 − 𝜓𝑡) induced by PS^{-}_{j} units countering psychological safety (differentiation force).

To grow and expand a psychological safe space, we need 𝛿 > 0, but for large 𝛿, the system can oscillate and even tip into chaos and a state of entropy. This can happen due to resistance to change driven by psychological reactance or unconstructive behavior, exploiting the space for ego-self-differentiation expressed by (1 − 𝜓𝑡 ) . A very large 𝛿 can lead to oversupply of psychological safety, resulting in over-synchronization, eroding social system efficacy through groupthink.

Graph 1.0: Logistic map of psychological safety

Thus, efforts to create a psychological safe space must be tactfully consistent to create a functional attractor but not overpowering to account for inter-and intra-group variations e.g., previous, and current generations if the latter are not initiating the change for psychological safety as they should according to their status of seniority and as discussed under equation 1.0.

Another interpretation is that once 𝜓 = 1 efforts should be undertaken to keep the space but not to overreach and expand it beyond the useful e.g., reducing the incentive for self-control and inviting the exploitation of safe space to the sole benefit of some group members such as, complacency, freeriding, or a situation of dysfunctional over-synchronization11 which is likely to happen for large 𝛿. In general, we can define the optimal level of psychological safety as:

Equation 1.5

𝜓_optimal: 𝜓 ≃ 1

 

Another interpretation is a chaotic system, in case of a dyadic relationship the small difference e.g., in semantics (semantic dispersion) at the beginning of a social process that can tip the system into chaos if it is sensitive to the initial condition as described in equation 1.41.

 

1 https://family-hippocampus.com/synchronicity-the-importance-to-synchronize-social-systems

Psychological Safety| 4 September 2023

 

Equation 1.41

|𝛿| = 𝑥0 − 𝑥0 ′ ≠ 0 ⋀ 𝜆 > 0
𝜆: 𝐿𝑦𝑎𝑝𝑢𝑛𝑜𝑣 𝑒𝑥𝑝𝑜𝑛𝑒𝑛t

 

 

In general, social systems are sensitive to the initial condition¹² and thus, they are prone to chaos, satisfying equation 1.41.

One interpretation is that the system stays 𝜆 > 0 but given a highly functional initial condition characterised by an optimal safe space, chaos is less likely.

Alternatively, we can see psychological safe space leads to a functional attractor (e.g., shared purpose) that is pertaining to 𝜆 < 0 which is tantamount to a system not prone to the initial condition and therefore, is not prone to chaos.

𝑥0, 𝛿, 𝜓, 𝜆 can be influenced through social understanding, rapport building and synchronization as we describe in the following paragraphs.

 

Social understanding

Social interaction is fundamental to the Anthropocene and its evolution. It is through intermittent synchronization that superficial social interaction transforms into a relationship. It is a process of discovery of overt behaviors and the synchronization of internal states (attitudes, beliefs, values, emotions, etc.) of the other person, alternating between differentiation and integration of information that enables the dynamics of social connection.

The role of social dynamics challenges the Darwinian model of separation with random variations and selection processes as it focuses on (intentional) integration (e.g., cooperation), forming social units with traits, norms, traditions that last for generations and play a key role in a dialogue of cultural and genetic evolution of humanity which is summarized in the dual inheritance theory (DIT)¹³. Socio-emotional patterns based on subjective experiences and attachment styles (secure or insecure) change gene expressions that are passed on to the next generation (transgenerational epigenetics) which will be discussed later in more detail.

All influence cognitive functioning which is a process of selective temporal coordination resp. synchronization of sub-sets to differentiate and integrate information allowing for perception, feelings, and thoughts.

 

¹² Chaos Theory in the Social Sciences, L. Douglas Kiel et.al., Michigan. 1997
¹³ The Social Impulse, Jaimie A. Pineda, Springer, 2022

Psychological Safety| 4 September 2023

 

 

In general, to exist means to interact¹⁴, and we assume that neurotypical agents would like to exist, preferably in a space without threats to one’s existence.

Taking turns in communication leads to oscillations, and if resonant, synchronization can emerge. Thus, social understanding and psychological safety are fundamental to humanity and its evolution, but they need to be created.

Every agent generates a subjective reality, and there is no universal truth of reality because it is a social construct, driven by individual needs, desires, and perceptions, resp. interpretations of the same data set. The knowledge of our environment is a function of our perception fed by our 5 senses and begs the question if the environment that we perceive exists at all (David Hume) and our knowledge is not a function of things we observe; things are rather a function of our knowledge (Immanuel Kant).

To make meaning of the data presented we engage in pattern recognition and pattern completion, filling in the blind spots with beliefs (i.e., epistemological irrational convictions), narratives, and assumptions which drive our conclusions and cognitive biases leading to illusion clusters to make meaning resp. reduce cognitive dissonance, which is a strong repeller. Conversely, cognitive resonance is a strong attractor, and we like to adjust our world in a way that we achieve cognitive and emotional resonance using confabulations. This comprises the well-documented ‘confirmation bias’, which favors belief-confirming information over disconfirming information and the Echo Chamber effect that essentially describes reinforcing feedback loops of the confirmation bias, amplifying held beliefs.

Thus, absolute truth does not exist, and we need to understand the truth of reality and even rationality as a probabilistic phenomenon:
Equation 2.0
P(\text{TRUTH}) = \begin{bmatrix} \approx 1 \\ \approx 0 \end{bmatrix}

The probabilistic approach to truth is a System II15 activity that forms the judgment which over time becomes detached from the process that created it. Judgments are created by a neural cascade of associative processes where one element triggers other elements retrieved from memory that is shaped by events that happened in temporal proximity in a given context to create functional units of

¹⁴ Illusions of Human Thinking, Gabriel Vacariu, Springer
¹⁵ Thinking, Fast and Slow, Daniel Kahneman, 2012, Penguin

 

higher order with supraordinate meaning which potentially can change over time, but then we have a natural tendency to resist change.

The so-called corresponding truth of reality arises from an interplay of creating theories of truth followed by being actively open-minded and researching evidence for the theory and its adaption or adoption, depending on the outcome which we can combine with the coherent theory of truth which questions the consistency of the theory¹⁶.

But the maintenance of the judgment becomes an important functional unit which can be immune to new information disconfirming it; this is in a bid to be self-consistent and self-sustaining which corresponds to the confirmation bias where existing beliefs are reinforced by selective perceptions if a new judgment process for self-validation which is triggered in context of psychological ambivalence.

Social agents even tend to avoid uncertainty and lengthy judgment processes and thus make fast judgments based on System I and their need for closure¹⁷, conceptualize and categorize stimuli to reduce uncertainty by taking control and structuring reality for better orientation which reduces stress responses, but the resulting dichotomy leads to misjudgments, false assumptions, and misunderstandings which are self-sustaining for the reasons mentioned above.

Ideally, agents follow their convictions (= judgments resp. functional units) that are descriptive, i.e., open to epistemology and thus, multi-stable and adaptable. Agents who resist adapting their convictions considering counter-evidence are deemed delusional, i.e., they hold epistemically irrational conviction and beliefs with mono-stability.

This is different with normative convictions, which correspond to moral cognitions and cultural, resp. moral beliefs that are not viably testable. It is rather a philosophical phenomenological argument without the possibility of finding pro or contra evidence¹⁸.

Thus, for mutual intelligibility, agents need to engage in a social process and produce a corresponding (and shared) reality, where they interact iteratively and reciprocally contingent upon each other’s social signals¹⁹, which includes the transduction and perception of social information, social cognitions that shape the content and structure of sent and received social information in conjunction with the ability to rationally understand and regulate own emotions (intrapersonal emotion regulation) and the emotions of others (interpersonal emotion regulation).

 

¹⁶ Die Illusion der Vernunft, Philipp Sterzer, Ullstein, 2022
¹⁷ Thinking, Fast and Slow, Daniel Kahneman, 2012, Penguin
¹⁸ Die Illusion der Vernunft, Philipp Sterzer, Ullstein, 2022
¹⁹ Social Cognition and the Second Person in Human Interaction, Diana I. Perez et.al., Routledge, 2022

 

It requires protagonists to shift conscious experience to spatio-temporal locations outside the current stream of experience and abstract a viewpoint of another mind with the support of episodic and autobiographic memory functions to track behaviors of self and others²⁰.

They need to be open to question perceived patterns and beliefs of self and others and adopt epistemology as a guiding principal and accept phenomenology as a framework.

The resulting cognitive representations agents develop are a form of cultural learning that changes the brain structures and the respective mental models of the world of the interacting agents.

Dynamics in social processes are characterized by agents making socio-psychological attributions (pattern recognition) about their respective cognitive and emotional current as well as future states with probabilistic predictions about the displayed resp. tacit intentions, the authenticity of communication, and evaluating the social exchange in terms of (anticipated) reward that creates an attractor pattern via PS_{ij}^{+}  behaviors or threat, that creates repeller patterns via PS_{ij}^{-}  behaviors, which makes social processes path-dependent and irreversible in nature.

Social understanding through correct attributions of mental states and reading primary and secondary emotions is the necessary condition for efficient, functional social processes, resp. social oscillations at optimal frequencies and amplitudes.

Empathy is at the core of social understanding. It is geared towards creating social coherence through mental mirroring of states, taking cognitive and emotional perspectives.

Understanding others is researched on a neuroscientific level thanks to brain-hyperscans, where neuronal activities of two or more persons in interaction can be researched.

Social cognitions can be broken down into an affective part which includes emotion recognition, empathy (feeling with the other person), and compassion (feeling for the other person) which occurs mainly in the right hemisphere of the brain²¹, as well as a cognitive part, (which includes language processing) and cognitions about the affective state and the mental state of another person and is a left-brain activity²².

The social interaction engages the cognitive control network [CNN] as well as the default mode network [DMN], which is active when the mind is not task-focused and wanders. It is a distributed neural activity in the brain characterized by greater variability of functional connectivity patterns important for meta-cognitive processes with greater functional variability than the CNN and plays a

20 The Social Impulse, Jaimie A. Pineda, Springer, 2022
21 Facial Expression in Empathy Research, Christina Regenbogen et.al., in Understanding Facial Expressions in Communication, Manas K.
Mandal, Springer, 2015
22 Facial Expression in Empathy Research, Christina Regenbogen et.al., in Understanding Facial Expressions in Communication, Manas K.
Mandal, Springer, 2015

 

pivotal role in meaning making and the creation of purpose. Both brain states are mutually exclusive
and alternate in social processes.

Most important for social understanding and social connections is the DMN, which involves the emotional circuitries in the brain23 and has a functional role in creating meaning and utility in mental life. The functional asymmetry of the brain’s hemispheres is structural as well as biochemical.
Neuropeptides are asymmetrically distributed, and the right brain features more spindle cells that are implied in social cognition.

Cognitive processes in social understanding occur in temporal, neural couplings between and agents are making inferences about the state of the other person based on the perception through sensory acuity to pick up signals from facial expressions, posture, prosody (emphasis through intonation and body language to convey emotional intent), choices of words etc. factoring in cultural context related differences and dialects in emotional expression.

Body language mirrors emotional states and serve as deliberate and nondeliberate communication signals while interacting with a perceived eco-sociological context defined by remembered past experiences from social interaction rep. interpretations of past resp. present and expectations about the future protagonists have and by the mutually perceived social status, group membership and power asymmetry embedded in social norms and emotion-display rules.

Agents tend to adapt and attune their behaviours to the requirements of the current context, a matching process summarised in the enactment theory.

 

The Theory of Mind

Pivotal to enactments in social processes is the Theory of Mind [ToM]²⁶, a cognitive, empathic, and shared process that occurs embedded in a socio-ecological context that is not necessarily perceived isomorphically and consists of two major components that interact with one another. One is the theory of theories – i.e., theorizing about the mental state of others (cognitive perspective taking involving the vmPFC), with Bayesian updating one’s mental model of the world. Based on the multimodal signals sent, received, and interpreted by the responder, s/he makes predictions about the internal state of the other person and the associated next step. If the outcome is incongruent with the prediction, the prediction model resp. the applied probability distribution will adapt resp recalibrated, to improve the next ex ante prediction quality and/or to rationalize the false prediction.

²³ Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022
²⁴ Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022
²⁵ Facial Expression in Empathy Research, Christina Regenbogen et.al., in Understanding Facial Expressions in Communication, Manas K. Mandal, Springer, 2015
²⁶ The Neuroscience of Empathy: Research-Overview and Implications for Human-Centred Design, Irene Sophia Plank et.al. in Design Thinking Research, Christoph Meinel et. al., Springer, 2021

 

and improve the prediction quality ex post. Both strategies aim at reducing the cognitive dissonance arising from the false prediction. A zero cognitive dissonance resp. a good level of cognitive resonance is a strong attractor in the human psyche and so, we want to be right resp. are biased to confirm predictions with the help of confabulations. However, this ‘cognitive resonance attractor’ can be dysfunctional and lead to social misunderstandings, e.g., when the responding party confabulates and skews the information in a way that it fits their mental model of the world rather than joining the other person in her mental model of the world. Reducing this bias requires self-awareness which is an essential part of the individuals’ emotional intelligence [EQ] which we will discuss in more detail.

These inferences about the mental state of others work in conjunction with the simulation theory, an affective empathic process with cognitive elements. This process can occur unconsciously, at least before the subject becomes gradually aware of neuronal pattern-simulations. In any case, it informs the social counterpart on a deeper level about the mental and affective internal state of the other party which is emulated by the responder ‘to create an experiential understanding of the other person’ (Gallese et. al., 2004)²⁷ and supports the affective mind reading efforts for emotional perspective taking in a social context.

Reading, understanding, and predicting the emotional states of another person are essential effective social interactions, as emotions are firmly in the driving seat, evaluating, guiding, and modulating cognitions, attentions, intensions, and decisions as a precursor for behavioral patterns that a person exhibits in response to stimuli. They are essential signals that indicate ‘right’, i.e., congruency or ‘wrong’ i.e., incongruence of perceived information and they introduce biased resp. noise, especially in the form of unspecific emotions i.e., moods²⁸.

²⁷ The Neuroscience of Empathy: Research-Overview and Implications for Human-Centred Design, Irene Sophia Plank et.al. in Design Thinking Research, Christoph Meinel et. al., Springer, 2021
²⁸ Noise, A Flaw in Human Judgment, Daniel Kahneman et. al., William Collins, 2022

 

Emotions

Once emotions are triggered, they set in motion a cascade of neural activities, coordinating multiple physiological and psychological systems like motivation, priorities, attention, perception, action system, inferences, learning and memory organization, goal definition, decision making etc.²⁹

Emotions prepare for action and help us to survive e.g., when they induce foraging patterns to find food which elicits the reward system with the ventral striatum at the center in our brains, including the secretion of dopamine or the avoidance system which warns us of perceived danger with the amygdalae at the center. The amygdalae are central to social cognitions and build a network with the perception-action system, the mentalizing network, the mirror neuron network etc³⁰.

The amygdalae can be triggered outside our conscious awareness, i.e., activated via the subcortical pathway³¹, leading to flight, freeze, or fight reactions whereby it inhibits the rational thinking unit in the brain (pre-frontal cortex PFC), which is metabolically very expensive and would cost too much energy to engage.

A stimulus that predicts reward is a strong behavioral attractor while a stimulus that predicts danger is a strong behavioral repeller. But even negative emotions can induce the reward system in preparatory avoidance behaviors³². Another explanation could be a dysfunctional attractor which manifests e.g., in the Stockholm syndrome or individuals that are attracted by the aversive treatment of a romantic partner and seem to fall for the same type of partner repeatedly. Thus, emotions can be basic and complex, especially when other emotional dimensions are added like disgust, guilt, or shame. While healthy relationships with psychological safety are rewarding and resemble a strong attractor, seeking social contacts can also lower the reward stimulus³³, implying that a social partner needs to demonstrate proactivity in establishing the relationship.

The central nervous system features an opioid system which influences the arousal dimension of emotions, modulates the evaluative properties of emotions, alleviating stress, and dysphoria by shifting evaluations of internal states and the perception of the world. The role of the opioid system has been researched in the context of social relationships and strenuous physical exercise and might

 

²⁹ Evidence for the Universality of Facial Expressions of Emotion, Hyisung Hwang et. al., in Understanding Facial Expressions in Communication, Manas K. Mandal et.al., Springer, 2015
³⁰ Facial Expressions in Empathy Research, Christiana Regenbogen et.al., in Understanding Facial Expressions in Communication, Manas K. Mandal et.al., Springer, 2015
³¹ The Neurocognitive Mechanisms of Unconscious Emotional Responses, Wataru Sato, in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
³² Molecular Imaging of the Human Emotion Circuit, Lauri Nummenmaa et.al. in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
³³ Molecular Imaging of the Human Emotion Circuit, Lauri Nummenmaa et.al. in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023

 

be acting as a buffer against socioemotional stress, reducing negative emotions associated with misfortune outcomes for self and others.

The level of serotonin is also relevant, especially as it regulates the activities of the amygdalae in response to expressions of emotions and has implications for the response to aversive stimuli, exacerbating fear responses and favoring avoidance behaviors towards anhedonia³⁴.

Like oxytocin, which is secreted when we feel social attachment, the neuropeptides (dopamine, serotonin, opioids) have profound implications for affective patterns and thus, the avoidance and approach behaviors of individuals.

The level of secretion and the number of receptors in the brain correspond to how a person’s brain has been shaped, expressed in their individual mental model of the world which is subjectively created by the experiences a person makes in a specific cultural context at a micro-macro level, including secure resp. unsecure attachment and transgenerational epigenetics with profound implications for the ability to socially connect and synchronize at a deeper level.

 

Emotional signalling and reading

Social signals are inevitably defined by the subjective mental model of the sender when s/he encodes the message and skewed by the person decoding the signal based on their mental model of the world. The accuracy of reading emotions is predictive of empathy a person develops for others35.

However, there are neuro functional differences in the expression (i.e., encoding) and decoding of emotional signals. Experiences shape our brains thanks to neuroplasticity.

Engram variations are influenced by cultural dimensions which becomes relevant when we think of a widening diaspora of family members in business families and offspring that are growing up in different locations and cultures.

Functional differences in emotional encoding and decoding are present in agents that have formed engrams in the brain based on similar experiences of others by EQ driven reflection and analysis are more likely to engage in cognitive and emotional simulation which allows them to be more empathic and have greater social competence (i.e., SQ).

But there is also a structural gender difference between male and female agents which is supported by a large body of behavioural evidence that females have greater social and affective competence. According to a study conducted in Germany, women exhibit lower levels of narcissism than men, especially in top management positions36.

34 Molecular Imaging of the Human Emotion Circuit, Lauri Nummenmaa et.al. in Social and Affective Neuroscience, Paulo Sergio Boggio
et.al., Springer, 2023
35 The Neural Basis of Mentalizing, Michael Gilead, Springer, 2021
36 Die Jungbullen Kommen, Marcus Heidbrink, Victoria Berg, Folrian Feltes, Havard Business manager, Mai 5/2021

 

This corresponds to the fact that women show a greater interest and attention level in social and affective information, have a greater perceptual sensitivity, speed and accuracy in decoding emotional verbal and non-verbal cues like facial expressions with a better empathy attitude than men. The female preference for emotional information is confirmed by a more discriminative response demonstrated by greater activation of the amygdalae, insula and the anterior cingulate
cortex when looking at other people in distress, especially infants which is oxytocin modulated37. The difference in social perceptions impacts team psychological safety. Research in a corporate setting showed that females reported a lower level of psychological safety and that women leadership contributed to psychological safety (PS+)
38, an argument for social system diversification.
In general, signals are often encoded and decoded outside of our conscious awareness which is described as subliminal affective priming as opposed to supraliminal priming.

The emotions driving the prime signal arise fast, unconsciously and are expressed outside our conscious awareness.

Primes bias emotional evaluations and can be conveyed by non-verbal signals via facial expressions. Studies have found that subliminal, emotional primes through dynamical facial expressions have greater effect than supraliminal primes, hitting the amygdalae through subcortical pathways in approximately 100ms and thus, they are too fast to be consciously prevented by modulating emotional responses with cognitive effort. Feelings during social interactions can indicate that our amygdalae have automatically detected subtle, socially significant messages relevant for our state of being39. This drives decisions and behaviours in dyads based on threat and reward anticipations as
we discuss below under’ The Triadic Brain Model’.

Social agents need to be aware of these mechanics for message encoding and decoding with respect to creating a psychological safe space.

37 Sex Differences in Social Cognition, Alice Mado Proverbio in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
38 Revisiting Team Psychological Safety at Work: A Case Study Approach to Its Dimensions, Intergroup Variations, and Influencing Factors,
Dissertation No. 5122 University of St Gallen, Anna-Christina Leisin-Strecker, 2022
39 The Neurocognitive Mechanisms of Unconscious Emotional Responses, Wataru Sato, in Social and Affective Neuroscience, Paulo Sergio
Boggio et.al., Springer, 2023

 

The Location of Emotions

Emotions are an embodied phenomenon⁴⁰.

The body is instrumental to emotional processing as it is sensing, responding, and triggering emotions and provides us with information as per the ‘somatic marker hypothesis’ of Antonio Damasio⁴¹. Emotional processing and reasoning come together in decision making and prosocial behaviors require empathy and emotional connection, the basis for societies to exist⁴². Certain neural assemblies in the brain generate emotional states like the amygdalae leading to emotional patterns that are an irreducible, bodily experience, comprising biological, cognitive, and affective processes involving the calming parasympathetic and excitatory sympathetic nervous systems and eventually, the whole body in relation to a physical and social context that is defined by the subjective interpretation of multimodal sensory input.

Central to our bodily, visceral experience is the insula, a neuronal mass which is the center of individual interoception⁴³ and proprioception that is connected to the vagus nerve, a part of the cranial nervous system (peripheral nervous system) which includes the brain stem and is responsible for senso-somatory and senso-motor information exchange, receiving gustatory, olfactory, auditory, visual, and kinesthetic information and senso-motor functions involved in facial expressions, eye blinking, and tongue movements, etc.

Thus, the insula is a multi-modal convergence zone integrating autonomic, attentional (bottom-up and top-down stimuli) as well as affective and cognitive information and performs relay functions conveying signals of awareness and salience information. It integrates and differentiates signals across the 3 primary sub-regions it is composed of to coordinate neuronal processes in relation to the environment⁴⁴ and plays a vital part in social learning.

Social learning is a co-evolution of genes and culture, and the facial musculature is representative of it as it evolved to promote communication⁴⁵. Thus, humans are face-reading experts, an important part of social interaction and core to emotion expression⁴⁶. They have found that facial recognition (together with information from gaze and pupil dilation) is most important in emotional signaling and reading processes with intense neural activity of amygdalae in a threat monitoring role.The emotional recognition capacity is reduced to 70% without facial mapping as opposed to >95% with facial involvement⁴⁷.

In general, the insula is involved in experiencing physical pain, signaling a lack of homeostasis in the body. But perceived, experienced social rejection, e.g., based on facial expressions interpreted as rejection, elicits a response of the insula the same way physical impact does⁴⁸, which means that socio-emotional pain can be inflicted metaphysically, create emotional harm and injury resulting in negative emotional states that are leading to avoidance behaviors and somatic reactions. The insula also plays a fundamental role in the representation of self-awareness, sense of identity, physical boundaries, and agency, plus it is implicated in social cognitions like empathy at a deeper level as it delivers a representation of other people’s emotional state of feeling⁴⁹.

Corresponding to individuals displaying emotional states outside of their conscious awareness, it has been shown that assuming postures or facial expressions associated with a particular emotional state can, in fact, induce this emotional state in the proband. The embodiment of emotions and cognitions is bidirectional as positive cognitions lead to positive emotional states and emotive patterns change cognitive patterns. NLP (Neuro-Linguistic Programming) is a practice that relies on these mechanics to read, analyze, and help people with dysfunctional behavioral patterns based on their underlying thinking and feeling patterns driven by individual mental models of the world. Finally, emotions are also represented in the ‘heart brain’ and ‘gut brain,’ organs that carry the same neurons the human brain is made of and thus, they relate to the brain itself.

Given these insights from cognitive-affective neuroscience, it is remarkable that the “Cartesian framework (i.e., the separation of body and mind) represents a persistent bias in leadership literature”⁵⁰.

⁴⁰ Social and Affective Neuroscience of Embodiment, Marilla Lira da Silveira Coelho et. al., Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
⁴¹ Somatic markers and the guidance of behavior: Theory and preliminary testing. Damasio, A. R., Tranel, D., & Damasio, H. C. (1991), In H. S. Levin, H. M. Eisenberg, & A. L. Benton (Eds.), Frontal lobe function and dysfunction (pp. 217–229). Oxford University Press.
⁴² Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022
⁴³ Social and Affective Neuroscience of Embodiment, Marilla Lira da Silveira Coelho et. al., Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
⁴⁴ The Social Impulse, Jaimie A. Pineda, Springer, 2022
⁴⁵ The Social Impulse, Jaimie A. Pineda, Springer, 2022
⁴⁶ Social Cognition and the Second Person in Human Interaction, Diana I. Perez et.al., Routledge, 2022
⁴⁷ Facial Expressions in Empathy Research, Christiana Regenbogen et.al., in Understanding Facial Expressions in Communication, Manas K. Mandal et.al., Springer, 2015
⁴⁸ Research in social neuroscience: How perceived social isolation, ostracism, and romantic rejection affect our brain, Cacioppo & Cacioppo, 2016, in P. Riva & J. Eck (Eds), Social Exclusion, Springer
⁴⁹ Social and Affective Neuroscience of Embodiment, Marilla Lira da Silveira Coelho et. al., Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
⁵⁰ Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022

 

Interpersonal Connection at a Neural Level

Inter Brain Synchronization [IBS] is the mutual, temporal alignment of neural activity where one brain modulates the activity of the other brain⁵¹ and vice versa. IBS is detected by alpha-mu brainwaves in the right hemispheres of social agents⁵² and is promoted by behavioral synchronization and is enhanced within emotional contexts⁵³. Thus, it is not surprising that synchronization at a behavioral level is followed by the synchronization of internal states at a deeper level which in turn increases synchronization at a behavioral level.

The fact that we can form functional relationships, can develop an action understanding resp. a Theory of Mind (ToM) is related to the existence of the mentalizing network including the temporal parietal junction [TPJ] and the medial prefrontal cortex [mPFC] which is also implicated in goal representation and the mirror neuron system which was detected by the neurophysiologist Giacomo Rizzalotti⁵⁴. It is multimodal and together with the mentalizing network, it is responsible for imitation learning based on observations, the understanding of other people’s intentions, sharing goals, emotional contagion, and understanding verbal as well as non-verbal cues of others such as facial expression and language patterns. It is central for empathy, compassion, and social connection plus it is involved in conveying signals that are incongruent with the observer’s value set, eliciting activities in the ACC (anterior cingulate cortex implicated in prediction-error detection), amygdalae (threat detection), and the insula (implicated in visceral responses) e.g., when witnessing another person in distress as it is received through the Mirror Neuron System (MNS) and simulated in the observer’s body, whereby experience modulates the responsiveness of the MNS⁵⁵.

The merits of inter-brain synchronization have been researched. Interpersonal (anticipatory) coordination requires a shared goal that leads to shared attention or adopting the same cognitive perspective, dancing (leader-follower dynamics) impacts significantly on bonding, social cohesion, trust, and cooperation among social agents⁵⁶. In the context of hyper-scanned dyads engaging in a collaborative Design Thinking process, the level of IBS correlates with the level of comprehension in social processes and increases with (rewarding) cooperation⁵⁷ forming a positive, reinforcing feedback loop for synchronization.

⁵¹ Social Cognition and the Second Person in Human Interaction, Diana I. Perez et.al., Routledge, 2022
⁵² In Synch, Andrzej. K. Nowak et.al., Springer, 2020
⁵³ Emotions promote social interaction by synchronizing brain activity across individuals, Nummenmaa. L. et.al, Proceedings of the National Academy of Sciences
⁵⁴ The mirror-neuron system, Giacomo Rizzolatti and Laila Craighero Annual Review of Neuroscience 2004 27:1, 169-192
⁵⁵ Mirror Neurons in Action: ERPs and Neuroimaging Evidence, Alice Mado Proverbio et. al., Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
⁵⁶ Social Cognition and the Second Person in Human Interaction, Diana I. Perez et.al., Routledge, 2022
⁵⁷ The Neuroscience of Team Collaboration During Design Thinking Event in Naturalistic Settings, Naama Mayseless et.al., in Design Thinking Research, Investigating Design Team Performance, Christoph Meinel et.al., Springer, 2020

 

Thus, the MNS is essential to social connection, to co-create a shared meaning space which morphs into a shared, functional reality.

Trust

Trust is the necessary and initial condition for psychological safety to emerge, which in turn nurtures trust reflexively. Trust can be construed as a heuristic wager on predictability and benevolence of others⁵⁸. It is a social construct and a bet that bridges information gaps arising from information asymmetries reducing social transaction costs resp. agency costs because trust reduces perceived uncertainty. Reduced agency costs are one of the major factors that contribute to the outperformance of family businesses vs. nonfamily businesses⁵⁹.

Trust lowers cortisol levels as it insinuates ‘safety’ and lubricates cooperation which is important for survival. Trust fosters social connection and well-being as it mitigates stress levels through oxytocin release because we feel we belong which reduces the threat potential which is calming the amygdalae.

Conversely, betrayed trust is a massive prediction error, deeply traumatic and difficult to recover from. Neural responses involve the anterior cingulate cortex ACC and the insula⁶⁰, which can be interpreted as social rejection and implies a visceral reaction corresponding to embodied emotions discussed above. Because betrayed trust is an attack and threat to the SELF, the amygdalae respond, eliciting the sympathetic nervous system and initiate a fight, flight, or freeze reaction.

Thus, trust is risky and can even result in maladaptive behaviors e.g., too much trust may invite misuse and transgressions which corresponds to equation 1.4.

On the one side, trust helps to reduce prediction errors but if misused, it triggers adverse reactions that may be ever so small and tacit in the moment but can grow exponentially to pose serious problems for the entire social system as it is tipped into chaos and in a state of entropy. Betrayed trust also creates beliefs that elicit avoidance behaviors as a form of self-protection.

Thus, trust is a personal optimization problem which we approach via Bayesian updating. However, trust is often established quickly without much due diligence as a probabilistic belief about other people. We often rely on simple, explicit, and implicit heuristics to attribute trust that emerge reflexively between top-down and bottom-up processes that hinge on perceived similarity. Top-down markers are group identity and stereotypes⁶¹ as well as halo effects. Bottom-up trust building

⁵⁸ Trust in Social Interaction: From Dyads to Civilizations, Leonardo Christov et.al. in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
⁵⁹ Family Governance and Firm Performance: Agency, Stewardship, and Capabilities Danny Miller, Isabelle Le Breton-Mille
⁶⁰ Trust in Social Interaction: From Dyads to Civilizations, Leonardo Christov et.al. in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
⁶¹ Trust in Social Interaction: From Dyads to Civilizations, Leonardo Christov et.al. in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023

 

occurs passively through perception of similarity that predicts affiliation, and these people are more likely to be empathized with and trusted reflexively.

Active trust building involves curated similarity by rapport building measures through mirroring and matching verbal and non-verbal cues, joint attention, and action such as collaboration and cooperation that translates into affinity and trust⁶².

Conducive to trust building in social interaction are perceived competency, integrity, reliability, transparency, respect, and consistency in behaviors. Violations of these principles erode trust. It shows that trust is a social skill that can be learned and socially constructed. After all, it is about making the correct predictions about the actions and reactions of others resp. making oneself more predictable for others which requires us to be vulnerable, something we are only willing to do in a psychologically safe space.

In the absence of trust, which is the initial condition for a psychological safe space to emerge, we tend to exhibit a self-protection bias, holding our cards very close to the chest which creates information asymmetries that only can be bridged with trust.

To create a psychological safe space, one must start with building trust actively!

Structural dynamics

Similarity and compatibility of the three communication domains (David Kantor, 2012) play a significant role in social understanding⁶³ and trust building as discussed above.

The language of ‘power’, which is a cognitive control network [CCN] dominated activity, is focusing on words such as accountability, competence, driving things forward, status etc. The affect domain is a default mode network [DMN] dominated neural activity exhibiting language patterns around emotional topics, social connection and cohesion, trust, rapport, relational patterns etc. The most complex domain is meaning, describing the meaning system individuals have. On the one hand, the DMN is involved in creating and reflecting on purpose, vision, and mission, having an active open mindset and a growth mindset to explore and inquire, on the other hand it involves the CCN to hone into the formulation of the purpose and how to achieve the outcome corresponding to the purpose⁶⁴. It reminds us on the Design Thinking Process which also oscillates between divergent thinking (DMN activity) and convergent thinking (CCN activity).

From an evolutionary perspective it is comparable to the oscillation between Darwinian differentiation on a micro level (CCN activity) and integration on a macro level (DMN activity).

⁶² Trust in Social Interaction: From Dyads to Civilizations, Leonardo Christov et.al. in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
⁶³ Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022
⁶⁴ Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022

 

A dyad is prone to conflict if their communication domains are incompatible (PS-). A good communicator that creates a psychologically safe space needs to be apt in speaking and understanding all three language domains (power, affect and meaning)⁶⁵ and understand the oscillation patterns in the social evolution of a functional relationship. Misunderstandings can be interpreted as threat, especially in a perceived, psychological un-safe space.

Triadic Brain

To cooperate or not to cooperate is a social decision individuals make upon implicit and explicit request. The triadic brain is a simplified decision-making model⁶⁶ which can be used to illustrate neural patterns in decision-making. It is a digital model in the sense that it either is an approach decision (attractor), an excitatory process, and avoidance decisions (repeller), an excitatory process leading to flight, flight, and freeze reactions that also inhibit behaviors within the context of the evoked socio-emotional state of the decision maker, which is influenced by the socio-emotional context. The decision is a function of the anticipated valence and intensity of the emotional state in response to the calculated expectation values of the possible outcomes.

Graph 2: Triadic brain model

The agonistic neuronal assembly is the reward system with the ventral striatum at its core which evaluates positive outcomes and gives hedonic impulses because of predicted cognitive resonance (attractor), the antagonist is the amygdala which is at the heart of the evaluation of (anticipated) negative outcomes that predictively encodes cognitive dissonance, threats, and risk perceptions (repellers) which are highly active in social interactions.

If the activation of the reward system is greater than that of the fear center, with higher amygdala activation at the core, the likelihood increases that the decision will be made to approach and forage, yet when the fear center activation is stronger, avoidance behaviors will dominate because risk perception trumps the magnitude of the anticipated reward.

Unfortunately, threat and reward stimuli are computed asymmetrically. Perceptive processes are biased towards threat perceptions and responses, i.e., one elicitation unit that is interpreted as threat outweighs the elicitation unit that is interpreted as a reward since the brain’s main function is to keep us alive and thus, it tends to react conservatively.

A socio-psychological manifestation of this protection tendency is social influence that threatens people’s autonomy and sense of agency in forming and owning their own opinions resp. decisions. It creates psychological reactance, a motivational state aimed at restoring the threatened attitudinal freedom expressed in non-compliant behaviors⁶⁷. The more the individual is being persuaded and even coerced into compliance, the greater the force of resistance may be.

The general arbiter in psychological ambivalence is the prefrontal cortex [PFC] resp. the CCN. It can tip the balance and the system’s trajectory gravitates towards ‘approach behavior’ (attractor) or ‘avoidance behavior (repeller) in a non-linear fashion e.g., in a downwardly skewed, sigmoid function for neurotypical agents:

 

67 Brehm, S. S., &Brehm, J. W. (1981). Psychological reactance: A theory of freedom and control. New York: Academi

 

Graph 2.1:

0.5 marks the point of indifference and values above 0.5 are attractor values while points below 0.5 are repeller values. The graph 2.1 demonstrates the asymmetry we alluded to above. Still, the CCN is the center of cognitions and rational thinking patterns, and some parts play a decisive emotion regulation role as they modulate and overrule appetitive and negative emotional stimuli.

However, the PFC can also be bypassed and switched off by dominant emotional forces, especially in situations that are perceived as threatening, leading to cognitive control failures. Sub-cortical patterns generally dominate cortical intervention attempts: the conscious and ‘rational’ part of our decision-making process is reportedly only between 1% and 5%⁶⁸. Decisions are made well before we become aware of them. Hence, much time in decision-making processes is spent on post-rationalization with motivated reasoning.

 

Navigating the Triadic Decision-Making Model

Humans are socio-emotional beings, and thus, dissonant leadership styles tend to trigger fear and stress responses [PS-], resonant leadership styles that also provide context, are conducive to creating a psychologically safe space [PS+].

To navigate the terrain, we can work with the conscious and unconscious parts of the brain.

Framing

The ventromedial part of the prefrontal cortex [vmPFC] is the control center which mediates between the ventral striatum and the amygdala and can modulate reward as well as fear stimuli. It holds information about the context of the situation and can increase and decrease the activation levels in both neuronal assemblies. The framing effect is an example of vmPFC activity⁶⁹ that tips the balance as it epitomizes the power of linguistic subtlety in regulating decision-making, experiences, evaluation, preferences, and persuasiveness of messages⁷⁰. Experiments revealed that choices between logically two identical sets of options depend on how the options are framed⁷¹. In marketing research, the framing condition was the top choice predictor, followed (!) by the expected economic pay-off⁷².

Validated methods that make use of the vmPFC are communication and framing models developed in neuro-leadership (SCARF and SCOAP). Thus, the vmPFC is a very powerful unit in the brain and framing helps to regulate emotional states of others.

SCARF: S stands for addressing the status of a person in relation to others, C for certainty which corresponds to people being able to predict and navigate the social dynamics of the social space they are part of, A for autonomy, which is people’s sense of agency and accomplishment (differentiation), R for relatedness which is the sense of belonging, connection, and inclusion (integration), and F for fairness, i.e., the mutual perception of fair social processes (integration). Communication based on SCARF principles stimulates the reward center⁷³.

⁶⁹ The Neuroscience of Leadership Coaching, Patricia Riddel et.al., Bloomsbury, 2015
⁷⁰ Framing Effects: Behavioural Dynamics and Neural Basis, Xiao-Tian Wang, Lilin Rao, Hongming Zheng in Neuroeconomics, Springer
⁷¹ Thinking Fast and Slow, Daniel Kahneman, Penguin
⁷² Framing Effects: Behavioural Dynamics and Neural Basis, Xiao-Tian Wang, Lilli Rao, Hongming Zheng in Neuroeconomics, Springer
⁷³ Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022

 

Example SCARF⁷⁴:

Frame	PS+	PS–
Status	Your contribution forms a critical part of the success of our family enterprise	I will discuss with my close collaborators and let you, at the end of the food chain know in due course
Certainty	We all know change is coming and we need to prepare for it	We can’t tell you anything as everything is confidential and discussed behind closed doors.
Autonomy	We encourage you to manage this process in accordance with your own needs and preferences	Everyone is required to act in a certain way with immediate effect and comply
Relatedness	Your presence is an asset to our family	I and senior leadership make decision and set priorities for you to obey and enact
Laughing Bacchus Winecellars	Yoshi Tannamuri	Canada
Fairness	This organizational change would be meaningless unless it applied to everyone	The new policy will apply to all but myself and senior leadership

The SCOAP^TM model is geared towards basic needs such as self-esteem (S), which corresponds to self-worth (differentiation) embedded in a cultural context (integration), the need for control (C) which insinuates a sense of agency (differentiation) and security, orientation (O) the need to navigate the social space and which is threatened when goals are unclear or communication is ambiguous as people fear the danger of getting lost, attachment (A) which is at a deeper level as relatedness (integration) and also includes people’s childhood experiences which can lead to transferences and projections and pleasure (P) as the center of hedonic reward.

Communication based on SCOAP^TM principles targets a more holistic experience⁷⁵, leading to lower stress levels and better performance.

⁷⁴ Adapted from: Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022
⁷⁵ Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022

Example SCOAP⁷⁶:

Frame	PS+	PS
Self-Esteem	This contribution highlights the best of what our family members can achieve	Your contributions are distracting and worthless, please sign and shut up
Control	We will give you the education, tools and support you need as responsible shareholders	I control this with my collaborators because of your incompetence
Orientation	This is line with our vision of transgenerational resilience and anti-fragility of our family enterprise and goes beyond industry standards	We take care of everything, and you will sign off the outcome at the year end
Attachment	Family members like you play a vital part for transgenerational success and will always have a home in our family	It is a clear us-them divide and shareholders do not play a part in corporate governance as they don’t belong to it.
Pleasure	We are looking forward to a fun family day with all of you where we can rejoice and connect socially	There is no pleasure in engaging with shareholders, but we have to do it!

Both models help to communicate more attentively to human needs eliciting the reward system as well as reducing the stimulation of the fear system.

On top, if social communication is responding to the basic need of integration, i.e., relatedness and attachment resp. the segment of ‘love & belonging’ in the pyramid of Abraham Maslow⁷⁷, it stimulates the secretion of oxytocin which is known to reduce stress levels and fosters synchronization on a deeper level. Thus, being with the pack suggests security, being rejected is a threat signal causing stress responses.

Likewise, perceived similarity of agents and mutual likability (which mediates synchronization) reduces psychological reactance and the need for differentiation and fosters the willingness to integrate and exhibit more compliant behaviors⁷⁸, which is a major argument for the introduction of a psychologically safe space. The perception of similarity and liking someone are sub-cortical activities driven by emotions rather than by purely cognitive processes.

 

Emotion Regulation

It can be described as the selective avoidance of unpleasant states (repeller) and relies on the functional interplay of mind and action, the ability of accurate self-perception and corrective action based on the understanding of the self-structure, the largest psychological structure that gives rise to belief-systems, meaning structures which provide a frame of reference used for the evaluation of experience and that shapes perceptual resp. behavioral tendencies which is applicable to all agents in a social process.

A person that exhibits role-dependent behavioral patterns that are perceived consciously and/or unconsciously in conjunction with the self-reference bias as an indication of PS- elicits avoidance behaviors such as self-protection, a form of basic risk mitigation and stress responses. Conversely, a person exhibiting behavioral patterns that predict a rewarding social interaction, i.e., PS+, become attractors in the social system.

Stress is a socio-emotional phenomenon linked to the level of psychological safety and the emotion regulation capacity of individuals. Stress signals trigger stress cascades⁷⁹, sparked by the amygdalae that are projecting to the hippocampus, the memory management system to check for similar enough, context-dependent stimuli that have occurred in the past and the ACC, which is implicated in error-detection processes and projects to the limbic system as well as to the frontal lobes to create somatic and cognitive stress and correction responses.

Normally, stress is a short-term response to internal or external stimuli that helps us to overcome obstacles and it temporarily disrupts our homeostasis (i.e., the way our body remains on an even keel). It originates in the amygdalae⁸⁰. Stress increases behavioral and psychological biases, in

 

78 Deflecting reactance: The role of similarity in increasing compliance and reducing resistance. Basic and Applied Social Psychology, 27,
277-284, Silvia, P. J. (2005).
79 Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022
80 Behave, Robert Sapolsky

 

particular, the self-protection bias. Stress reduces our capacity for patience, narrows our mind, reduces empathy, and our ability to trust.

PS- patterns are often related to stress the leaders experience, but they can counteract it through emotion regulation [ER], a learned core social skill used in linked to emotional awareness [EQ]. EQ is the necessary condition to develop SQ which corresponds to ToM capacity that makes social processes efficient.

ER is central to decision-making and subsequent behaviors: “Between stimulus and response is a space in which we can make choices” (Viktor E. Frankl). The space volume is a function of emotion regulation resp. EQ. Unmediated stressors shrink the space and agents become emotionally reactive and impulsive, emotion regulation increases the choice space and allows for more conscious responses in relation to the creation of psychological safe space.

Thus, EQ is also a necessary condition to be able to become aware, identify and even regulate emotional patterns of others which corresponds to sufficient ToM capacity, the core of SQ, an essential ingredient to create PS+ patterns.

EQ is also central to social connection because emotions are highly contagious thanks to the mirror neuron system (MNS) and one’s own emotional well-being which in turn, is important for a well-centered aura that invites people to trust and allows the person to respond in a calm way even when discussions are complicated and complex (attractor forces).

Emotion Regulation Methods

Depending on the cultural context, suppressing emotions is the prevalent method to deal with emotions, however, emotion suppression cannot be counted as emotion regulation. It’s a coping strategy comparable to a pressure cooker that can explode. Accumulated emotions build up tensions, followed by tension releases that show bursting patterns of aggression and reactivity, etc., leading to prolonged, elevated stress levels with ripple effects in the entire social system through PSbehaviors.

The emotional control units, the dorsolateral part (dlPFC) and the ventrolateral part (vlPFC), play a critical part in cognitive control, attention orientation, response inhibition, and mediating the activity of the amygdala (Wagner et. al. 2008)⁸¹.

Especially the right vlPFC (rvlPFC) is dubbed the braking system of the brain and the center of selfcontrol implicated in delayed or forgone gratification and managing emotional reactivity⁸².

⁸¹ Modulating the Social and Affective Brain with Transcranial Stimulation Techniques, Gabriel Rego et.al., in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
⁸² Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022

 

The starting point is awareness because what we are aware of, we can manage; what we are not aware of manages us. More specifically, it is about the awareness of emotional cues from self and others.

Affect labeling is a critical emotion regulation strategy that involves the anticipation, perception, and acknowledgment of feelings based on interoception and reflection to label the unspecific patterns and categorize them with verbal descriptions⁸³. This strategy is proven to activate the rvlPFC, reducing the neuronal activity of the amygdala⁸⁴ and a rich emotional vocabulary helps to communicate emotions, e.g., by giving emotional context and (anticipatorily) acknowledging emotions of others in social processes. It is part of social understanding when social interactants understand and label the affective be states of the agent within the prevailing context, personality traits, values and beliefs, attitudes, moods, and goals by active listening and discerning authentic signals from inauthentic signals. This allows creating an emotional context that is stress-reducing for other people as they feel acknowledged and heard (PS+).

Another proven ER strategy that activates the rvlPFC is cognitive reappraisal⁸⁵ or reframing by reflectively challenging current patterns of emotions and cognitions that may be maladaptive like jumping to conclusions because of underlying beliefs about self and others. Reframing failure as a learning experience is powerful in reducing stress levels. Leaders who encourage this reframe consistently foster trust, collaboration, and performance. It is the structural story that prevails, not the moral story⁸⁶, which is akin to playing the blame game no one can win but everyone adds to their personal stress cascade.

The third strategy to activate the rvlPFC is mindfulness practices if practiced regularly⁸⁷, e.g., to reach out to others and speak about problems, suspend self-judgment, and engage in selfforgiveness and to apply the same on social agents.

All three emotion regulation strategies are effective in building psychological capital that fosters mentalizing activities and cooperative relationships, which stimulate the reward system and release stress antagonists, i.e., a cocktail of neuropeptides like oxytocin, serotonin, opioids, dopamine, and dopamine-enhancing endorphins.

⁸³ How Emotions Are Made: The Secret Life of the Brain, Lisa Feldmann Barrett, Pan, 2016
⁸⁴ Modulating the Social and Affective Brain with Transcranial Stimulation Techniques, Gabriel Rego et.al., in Social and Affective Neuroscience, Paulo Sergio Boggio et.al., Springer, 2023
⁸⁶ Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022
⁸⁷ Neuroscience for Organizational Communication, Laura McHale, Palgrave Macmillan, 2022

 

Interpersonal Emotion Regulation Scheme⁸⁸

A distressed person meets another person that downregulates stress levels by exhibiting empathy-based behaviors.

‘Plus signs +’ indicate excitatory stimuli (attractors), ‘minus signs –‘ indicate inhibitory stimuli (repellers).

The stressed individual elicits cognitive and emotional empathy in the responder who engages in an external emotion regulation process involving specific neuronal assemblies in the brain, downregulating the intensity and valence of the emotion of the person in distress.

The inter-personal emotion regulator needs to have profound ToM capacities, i.e., emotional and cognitive empathy for emotion recognition and to deliberately select strategies that alter the emotional state of the other person. By the same token, s/he needs to possess intra-personal emotion regulation capacities to keep in the eustress zone regardless of the pressure and demonstrate emotional and cognitive stability resp. competency making social interactions rewarding – a strong social attractor for the social system (PS+). It leads to predictability, trust (PS+), psychological safety, and thus to the formation of a functional social unit that synchronizes to exhibit greater social efficacy than the sum of its parts would suggest.

⁸⁸ An Interbrain Approach for Understanding Empathy: The Contribution of Empathy to Interpersonal Emotion Regulation, S. Franklin-Gillette, G. Shamay-Tsoory in The Neural Basis of Mentalizing, M. Gilead, K.N. Ochsner (eds.), Springer 2021

 

Regulation of emotions is also essential in the distinction between sympathy and empathy resp. self-other distinction abilities. Sympathy can be described as the un-reflected synchronization of an emotional state that bears the danger of emotional contagion in a dysfunctional way e.g., initiating the same mentally paralyzed state the person in distress.

Empathy is a reflected, more conscious, and functional synchronization that preserves the mental and emotional agility of a supporting person that empowers them to create a psychological safe space at a time where it is most needed. A lack of emotion regulation erodes psychological capital and leads to cognitive control failures as the amygdala response reduces cognitive capacity because it is metabolically too expensive in fight, flight, and freeze reactions in a bid to survive.

The Stress-Performance Curve

The importance of emotion regulation of self and of others has implications for a psychological safe space and is illustrated below with the help of the stress-performance curve⁸⁹.

Graph 2.1: Stress Performance Curve:

A person that exhibits PS- patterns that are received consciously and/or unconsciously (unmediated by the PFC) creates psychological unsafeness that elicits stress responses which influences cognitive performance levels negatively. No stress weighs on performance as well, which corresponds to equation 1.4.

Eustress levels are optimal to perform at one’s best, which is more likely to happen in a psychological safe space.

⁸⁹https://psychology.stackexchange.com/questions/8512/how-to-measure-your-stress-levels

 

A stressed, reactive, control-obsessed manager or colleague with a tunnel view suspending any form of ‘active-open-mindedness’ with almost uncontrolled, impulsive outbursts and who’s close to a burnout is a repeller (PS-). An agent plagued with anxiety or depression is unable to take risks will not exemplify the leader that is trusted and who can create a psychological safe room (PS-). The extreme right part of this stress-performance curve is the toxic stress zone. While short-term stress helps us to overcome obstacles, prolonged and intense stress levels are intoxicating the body with glucocorticoids like noradrenaline and cortisol.

The triadic brain model of decision making, and the stress-performance curve illustrate how mental states emerge and decisions about behaviors are made, often outside of our conscious awareness with profound implications for cognitive abilities (IQ) and negative somatic implications as in disrupted regenerative processes, a weakening immune system, increasing heart rate and hypertension, etc.

Against the backdrop of PS-dominated behaviors, staff and family will prefer to exhibit avoidance behaviors which inhibit information flow, cooperation, and collaboration won’t occur beyond the necessary in order to survive. It is a psychologically unsafe environment in which everyone is prone to toxic stress levels since emotions are contagious, and people fall way behind individual performance potentials by exhibiting self-protective behaviors.

Toxic stress is even inheritable as gene expressions are altered and the altered state is passed on to the next generation without changing the DNA itself. Jean-Baptiste Lamarck (1444-1829) proposed that organisms pass on information gathered during lifetime and given to offspring which has developed into new field research called epigenetics, the study of phenotypic plasticity in response to socio-ecological stimuli on the variation of gene expression across generations⁹⁰. Thus, creating a psychological safe space that reduces socio-emotional stress has social-psychological effects as well as transgenerational physiological effects.

Stressed individuals will also be less likely to form a functional social unit for greater social efficacy which is more than the sum of its parts would suggest.

On the contrary, this situation leads to negative collective intelligence where the whole is less intelligent and less effective than the sum of its parts would suggest.

The triadic brain model as a basis for behavioral decision making and the stress-performance curve support personal interoception, contribute to ToM capacity, and thus to the creation of a psychological safe space if adhered to, especially in leadership roles.

⁹⁰ The Social Impulse, Jaimie A. Pineda, Springer, 2022

 

The PS Transformation – What Does It Change in Family Dynamics?

Succession is seen as a highly emotional and dynamic process with a variety of psycho-socio dynamics that make-or-break successful successions. The protagonists in this drama are the incumbent m/patriarch, the successor and his or her competitors/collaborators in the transfer and transition of ownership rights and governance power as well as leadership positions. While there is plenty to read about legal and governance aspects, relatively little is known about why ‘emotions spark’ between the actors in the succession process⁹¹. At the core are massive prediction errors based on frustrated expectations that are not matching because of differences in the mental model of the world and the inability of the protagonists to be aligned because they lack psychological safety, based on the inability to create it.

We all have expectations about future states. Implicit expectations vary in awareness levels, and some expectations are known to others – or so we think and hope.

In our social processes, we predict the behavior of others and monitor for indications that our expectations are met. Error detection leads to motivational emotions such as frustration and anger in case of a negative deviation that are conducive to either changing expectations or behavioral strategies. In case of positive deviations, the reward circuitry is triggered. Sadly, negative deviations have a greater emotional impact than positive deviations, which often leads to unproductive conflicts. When expectations are met, we take a neutral stance with satisfaction.

Our subjective mental model of the world holds all cognitions and emotions from experiences we’ve made in the past and creates a subjective reality. It processes the perception of information, recognizes patterns based on stored schemas, and engages in pattern completion if information is missing by making inferences in a given context to minimize prediction errors. This creates a subjective reality that is only partly shared with our social process partner without further ado.

It may not be surprising that a social process with two different mental models of the world and only a partly shared reality is prone to expectation errors and conflicts.

⁹¹The Socio-psychological Challenges of Succession in Family Firms: The Implications of Collective Psychological Ownership, Noora Heino, Pasi Tuominen, Terhi Tuominen, and Iiro Jussila in: The Palgrave Handbook of Heterogeneity among Family Firms, Palgrave MCMILLAN

 

This dynamic is further complicated by the fact that we are not consciously aware of most of our mental model as its programming is mainly unconscious as discussed above.

Possible expectations of the predecessor:

• The eldest son is taking over the business; it is his destiny and duty – because this is how things are done in my mental model of the world and it has always been done like this
• I paid for all these schools, now it’s his turn.
• There was no need to introduce him before succession date because it simply was my realm
• He will and must do me proud!
• He shall grow the business and deliver socio-emotional and financial pay-off for me
• I will maintain my status as patriarch, which gives me purpose
• I will tell him what to do because he cannot know.
• He respects my endowment to the business and what I have created – not changing a thing
• He will be thankful for me to have his back and guide his strategy

Possible expectations of the successor:

• I want to have autonomy over my life and pursue my own dreams
• If I choose to work in the business, I will have the respect as a leader also from the predecessor
• To create the necessary endowment to the family business, he will give me agency so that I pursue the dream I have for the business
• The patriarch will support and mentor me in teamwork so that I can achieve my goals

Apparently, there are two mental models of the world and limited room for negotiation in the absence of psychological safety. Some expectations may be tacitly known but not spoken about, some are spoken but disagreed on, openly or tacitly. Still, we find the eldest son taking over the business despite the incongruency of values, beliefs, self-narratives following social norms, and adapting moral justifications.

Typical moral reasoning for self-validation and justification by involuntary successors⁹²:

1. I must pay dad back; he did so much for me (moral obligation motive)

⁹² Trapped in the Family Business, Michael A. Klein, tfb

 

 

2. I’m the only one in the family who can do it (rescuer motive)

3. It’s my duty to take over and continue the legacy (victim motive)

4. Need to protect my parents and what they built, just as they protected me as a child (rescuer motive)

5. I need to prove to my parents that I can do it (right fighter, reactive narcissist)

6. I took it over by accident and continue because of all the time and energy I already invested (victim motive)

7. I had no choice but to take over (victim motive)

8. I didn’t want to upset anyone and complied with social norms (people pleaser motive)

9. The family business as a fall-back option because no job offer elsewhere (opportunist motive)

10. In the family business, I have the chance to be someone (narcissistic motive)

All these examples show how successors are incongruent with their decision to take over the business and the inauthentic motives that lead to the decision. These are moral dilemmas weighing on the relationship between successor and predecessor leading to stress-related lower performance of the individuals and thanks to emotional contagion, this is likely to infect the whole family and business system.

In an optimal psychological safe space in accordance with equation 1.5, it is likely that the successor and predecessor would have engaged in productive dialogues with the desired outcome of reduced information asymmetry, aligned mental models of the world, and congruent expectations during the transition period and along the time continuum.

A similar argument can be made for active shareholders in the family business. A psychologically unsafe space will not produce strong and engaged shareholders who could support the corporate governance by asking critical questions regarding business performance and provide vital impulses arising from the ever-changing socio-economic and ecologic context to adapt the business model for the future by listening to next-gen perceptions of the world.

A psychologically unsafe space simply wastes the talents one might have in the family and can even set them up for failure outside the family business in general or specifically in point 9. – the opportunistic motive to take over a business.

Another outcome of an unsafe space could be that people simply lose interest as they are scared away which is the ultimate reaction explained by the triadic model of the brain.

Summary

We have discussed what multi-generational family enterprises need in terms of culture. While the demands resonate with the next gen, anecdotal evidence and the call for a cultural change indicate deficits.

In this paper, we argue that the missing link is an optimized psychological safe space in which the next generation can unfold, blossom, and push for family enterprise evolution.

Psychological safety can be learned and created when we remind ourselves how we can curate social interaction by consciously adhering to its neural mechanics.

The basis for a psychological safe space is mutual social understanding that requires learnable social skills (EQ, SQ), which has profound neural implications.

We investigated the processes of social understanding, which involve the encoding and decoding of signals that are exchanged on a verbal and non-verbal, conscious and unconscious basis. This led to efficient social oscillations of agents with desired effects like interbrain synchronicity [IBS], an output of shared attention reducing the synchronization error and the resulting social system efficacy.

Social misunderstanding has the opposite effects, as a psychological safe space cannot arise, and people are likely to exhibit a self-protection bias that favors misunderstandings and elevated stress levels, which weigh on synchronization levels and performance.

To illustrate the issue, we have given an example from succession transitions that occurred in a psychologically unsafe space with inauthentic, incongruent decisions that favor elevated and prolonged stress levels in the absence of sufficient emotion regulation strategies.

Conclusion

It pays off to learn to tune into all fellow family members regardless of status and to develop a profound social understanding of each other and create a psychologically safe space which can reduce complexity. On hierarchical levels, compassion and empathy can be developed bidirectionally on a lateral as well as vertical level leading to an optimal psychological safe space in which everyone in the family system can and wants to contribute with 100% commitment, and conflicts are likely to have productive outcomes rather than disastrous implications including – but not limited to – being handed down following generations, where conflicts are almost impossible to solve.

Moreover, the family system can reduce its synchronization error and become synchronized which reduces psychological reactance of members, and the family system self-organizes into a functional unit of higher order with social efficacy which is significantly greater than the sum of the parts would suggest. Thus, the family system will be more agile and resilient; it can even become anti-fragile, i.e., it thrives in a VUCA world, learns, and gets stronger with every perturbation.

Once truly established, psychological safety becomes a culture which is passed on through generations by cultural transmission, i.e., social learning (imitation learning, observation learning), and through transgenerational epigenetics, creating more resilient and anti-fragile offspring that, in turn, create resilient, resp. anti-fragile social systems in future generations.

Outlook

Empirical research needs to be done in families to verify the levels of psychological safety resp. synchronicity and linked to transitional outcomes such as successions and the overall resilience resp. antifragility of family enterprise systems to understand the status quo and what could be possibly done to improve social system dynamics of family enterprises with suitable bottom-up interventions. We posit that bottom-up – social system interventions will be more sustainable and effective than pure organizational top-down family governance measures which are currently prevalent in the family advisory industry.

 

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Table of Contents[i]

Abstract. 2

Introduction. 2

Phase Transitions and ‘transegrity’ 4

Chaos. 6

Ontology. 10

Synchronization and Chaos. 12

Intermittent synchronization. 14

Operationalizing synchronization by coupling of logistic maps. 17

Attractors. 19

Chaotic Attractors. 20

Synchronisation effects. 22

Information and communication. 23

Noise in Swarms. 23

Channel Capacity and Information Entropy. 26

Synchronizing Mental Models of the World. 30

Synchronization methods. 32

Spontaneous Synchronization. 32

Collective Action – A manifestation of Social System Synchronization. 33

Curated Synchronization. 35

Transformative leadership. 36

Narratives as synchronization tool 38

Conclusion. 40

Summary. 41

Acknowledgement. 41

 

Abstract

The level of synchronicity is pivotal for the agility of social systems such as business families and takes precedence over the traditional family governance practices, especially when they are in a quasi-legal format.

Business families introduce complexity in decision-making processes through the family effect. We look at the challenges these families are facing to provide the basis for this paper. We then explore what synchronicity means in this context and discuss the outcomes and meaning in the light of family governance and how functional synchronicity is key to social-system efficacy that creates social capital and why dysfunctional synchronicity erodes it in significantly less time than it took to built.

Introduction

A culture of cohesion does impact on the external and internal social capital which are significant and quantifiable family-business advantages in terms of valuation. Family businesses are opaque and less transparent that non-family firms. In a world of high information asymmetry, status signals are very valuable, especially when they costly to imitate. Sending the status signal ‘family business with significant internal and external social capital’ demands a premium on the valuation of a family business in M&A transactions[1].

Thus, it is conceivable, that investing in the social system of a family enterprise leads to tangible performance and valuation premiums.

Business families are social systems characterized by continuous processes of coordination through verbal and non-verbal communication. Specifically, they are complex, socio-economic, dynamical systems with at least 3 layers: a macro level that describes the system, micro systems that describe the individuals that make up the macro-level and meso-levels i.e., clusters of individuals bound together by sympathy (cliques) or on a functional level based on the 3-circle model suggested by Renato Tagiuri and Professor A. Davies[2].

Accordingly, groups must be understood and investigated beyond well-defined roles, norms and identities as distinct groups but as overlapping social networks.

Business family systems are self-organizing systems, i.e., there is not one super-master or blue-print guiding and controlling the outcome of the system-evolution.

They share a common concern, goal, and exhibit shared attention but with multi-stability, i.e., the systems trajectory is shaped buy more than one attractor resp. repeller.

The system is prone to endogenous shocks and/or exogenous shocks. These shocks send the system into a transition phase while it changes trajectory. The carrying and adaption capacity of the system defines how resilient the system is. Any combination of shocks in number or magnitudes that result in impacts exceeding the system’s carrying and adaption capacity will tip the system into bifurcation or chaos, which depends on the number of freedom-degrees a system features.

In a recent study by the Cambridge Institute for Family Enterprises and Citi Private Bank[3], the respondents were concerned about difficult to navigate times in the 2020s described as a VUCA environment in an ever-growing interconnected world with more frequent and faster changes than ever.

Sources for exogenous shocks could be:

• Socio-economic and (geo) political dynamics
• Environmental changes and challenges
• Technological disruptions
• …

Endogenous shocks can emanate from:

• Marriage & divorces
• A newborn baby which could be a successor
• Widening diaspora and cultural differences
• Societal impulses like democracy, diversity, and inclusion
• The drive for self-actualization
• Generational divide and longevity of predecessors
  • Intergenerational communication / different belief-bubbles
• Succession planning: transfer and transition of wealth and governance
• …

The effective response to these perturbations relies on identifying signals of change and change of change (gamma), agility, and the attitude of ‘perpetual beta’, the commitment to constant self-improvement by updating beliefs, gathering, and synthesizing multiple perspectives with an active open mindset[4]. It is the art to embrace complexity and create carrying resp. adaption capacity within the social system, which requires a dynamical state of synchronization.

Synchronization is formative for social relations and promotes rapport [between the constituents] (Chatrand & Bargh, 1999, Dijksterhus 2008), makes groups resilient or even antifragile and more predictable, which is essential for service providers who want to serve family enterprises efficiently and effectively.

Phase Transitions and ‘transegrity’

Phase transitions in social change processes are triggered by an event, that causes a perturbation of an intensity that goes beyond a certain threshold of the systems, manifesting itself in action dynamics between the local level, meso- and macro level that influence each other reflexively across all family enterprise domains that John A. Davies proposed in his 3-circle model[5] within a given context that is defined by the immediate and wider socio-economic and geo-political environment.

On a meso level, i.e., the family circle, family business circle and owner circle and their overlaps have different subjective realities. That is in addition to the different subjective realities we meet on a micro level e.g., in social dyads, which are influenced by the pattering on a meso-and macro level the (the whole system, embedded in the influential social environment of which everyone is a part of. Over time, the micro-and meso-level shape the macro level.

Different subjective realities in a desynchronized state result in tension-build up and tension-releases, translating into endogenous shocks that perturb the social system.

Exogenous shocks are impulses from the environment, e.g., geo-political, ecological, and socio-economic shocks that impact on the family enterprise system and trigger resp. accelerate system transitions (see Graph 1.1). Conversely, the family system also influences the immediate socio-economic environment.

Graph 1[6]: Social system of a family enterprise

Constantly evolving external context, given by the socio-economic and geo-political environment, other external influences arising from societal impulses, cultural norms, advisor ecosystem…

Endogenous and exogenous shocks can send the entire family enterprise system into a transition phase which is not linear as illustrated below.

Graph 1.1[7]: Generic Transition Model for family enterprise social system

The predevelopment phase can be interpreted as the initial condition X_0, and the stabilization phase is a meta-stable state, where the system is temporarily stationary. Mind you, it can be a positive or negative state.

The greatest criticality is the acceleration phase where changes are happening very fast. It is a phase transition of 2^nd order. A system without sufficient adaption capacity risks tipping into chaos, followed by a stabilization phase after the system has reorganized itself but it may fragment during transition. The social system is therefore losing efficacy, eroding the likelihood of transgenerational, social, and financial capital preservation resp. creation.

Chaos

Chaos is a situation with dynamics that go beyond oscillation (short for recurrence of states) where auto correlation functions go to zero, hence predictions of any sort on any timeline are impossible as everything is seemingly random without repeating patterns in certain time periods. It is a situation of indescribable complexity, an incomprehensible primordial state also termed tohuwabohu[8].

The logistical map is a simple deterministic system with 2 opposing forces that can produce chaos, dependent on an order parameter.

It’s a system with a negative feed-back-loop that produces chaos dynamics when the carrying capacity is exceeded resp. the adaption capacity is insufficient.

Equation 1:

x_t+1 = x₀δ (1 – x_t)

With:

0 ≤ x_t ≤ 1 : current state of the system (fraction of the maximum carrying capacity)

0 ≤ x_t+1 ≤ 1 : state of the system subsequent time period

0 < x₀ ≤ 1 = initial state of the system (initial condition)

δ = Change rate – a control or order parameter

δ ≤ 1 : extinction

δ = 1 : stable and stationary

δ > 1 : growth dynamics

Examples of opposing forces for tension build-up and tension-release are:

• Conflicting roles, norm perceptions, interpretations and logics arising from the 3-circle model depicted in graph 1:
  • The business favours earning retention for growth x₀δ vs. excessive dividend demands from owners (1 – x_t)
  • Family-owners’ business growth requirements x₀δ vs. underperforming owner-family CEO (1 – x_t)
  • Thriving family-owners x₀δ vs. envying non-owning family members (1 – x_t)
  • …
• Goal divergence: next generation wants x₀δ, the predecessor generation wants (1 – x_t) eg., in succession dilemmas
• Any form of cooperation x₀δ vs. competition (1 – x_t)
• Personal impulses x₀δ vs. self-control (1 – x_t) e.g., in succession dilemmas
• …

Graph 2: Logistical Map as a function of the change rate :

The graph shows that a change rate of 1 < δ ≤ 3  keeps the system grow smoothly and balanced as the competing atrophy term (1 – x_t) works as a balancing feed-back loop or, depending on the control or order parameter δ, induces bifurcations or even chaos.

This could also be interpreted as old generations dying away or making room for next gen or other counteractive measures that are taken to balance the trajectory of the system (point attractor), a concept dubbed ‘transegrity’[9] or tensional integrity, which we also find in the brain (functional transegrity) where excitatory and inhibitory forces lead to useful behavioural outcomes.

With a fast change of the change rate δ from let’s say 1.5 to 3.45, (γ = 130%!) the system starts to bifurcate and oscillates between 2 significantly different states. At δ > 3.55 the system becomes even more unstable for all initial conditions x₀ and tips into chaos from 3.6 onwards. The system never revisits the same state (hysteresis).

This example illustrates that in the absence of adaption capacity, change rates δ and the speed of change (the second derivative referred to as γ in option pricing models) can have a profound impact on the family system that is now in a state of complete entropy.

We can influence x₀ which has initially great effects on chaos dynamics until δ = 3.55 We are limited in influencing δ or γ, so we need to create adaption capacity by introducing freedom degrees that allow us to respond with agility to the given parameters and bring the system back to an equivalent of 1 < δ ≤ 3 resp. create a functional x₀ for functional attractors to emerge.

The usual response is family governance with a family constitution that should prevent family systems from tipping into chaos which we can interpret as the change of the initial condition x₀. Reducing x₀ allows for higher δs but in this model, it is futile for δ ≥ 3.55

Institutions like formal family governance / family constitutions are balancing the trade-off between freedom and costs of reaching goals as a social system by an agreed set of rules and norms designed to guide collective behaviour for more complex social functions. The idea is to reduce complexity for the individual and to facilitate the navigation of social space by providing a frame of reference.

But family constitutions and family governance protocols can be dysfunctional as they can even introduce chaos. The economist Albert Hirschmann highlights 3 common objections to governance: perversion of governance by reducing adaption capacity, i.e., it aggravates the very problems that it intended to solve by reducing freedom degrees of the system that makes it more likely to tip into chaos. Family governance might be even futile when it is not being complied with (see below: compliance trade-off), and thirdly it may even contradictory as it puts other important values in jeopardy[10] which are deemed unintended consequences.

2^nd order phase transitions are and will become more frequent as discussed above and are rather the norm than an exception in a world of VUCA, so we can expect regular impacts with the equivalent of δ ≥ 3.45.

In fact, we are living on the edge of bifurcation and chaos. The big question is how we can ensure transegrity?

Ontology

As the equation 1.0 shows, we are dealing with a non-linear system that features feed-back loops and a changing trajectory depending on x₀δ.

The question arises if linear methods are sufficient to solve this non-linear problem!

To converge on a solution, we can utilize the Cynefin framework, a phenomenological sense-making device developed by C.F. Kurtz and D. J. Snowden[11].

Cynefin challenges basic assumptions in decision making:

Order: it implies a clear understanding of cause-and-effect relationships that can be verified empirically and are separated over time and space. Predictions are possible and interventions can be designed to drive, control, and achieve desired outcomes. Intelligence can be generated through analytical, reductionist research as whole equals the sum of its part, by scenario planning and standard operating processes as well as ‘Best Practices’ can be derived and applied.

This is a linear and very mechanistic view of the world which also implies repeatability and reversibility and lays the foundation for ‘business engineering’, a term that was very popular in the 1990s and is related to Taylorism, which is inspired by the reductionist view of Rene Descartes and Isaac Newton.

Rational decision-making is limited, as many studies in psychology and behavioral economic have revealed[12]. The mere fact that some 150 biases are identified, ruins the idea that humans are rational beings. Kurtz and Snowden define rational decision making as maximizing pain or pleasure which inherently belongs to the affective decision-making domain. In consequence, behaviours can be controlled and managed by influencing the perception and expectation about pain and pleasure as responds to certain behaviours individuals exhibit.

The last challenge is the intentionality of behaviours. Actions are always intentional and deliberate.

Assuming all three pillars of organizational support and strategy resp. rational, ordered system thinking are true, classical family governance would be sufficient to navigate the social system through all x₀δ situations.

A world that demands casual thinking is predictable and thus, it feels safe as seemingly it is easy to navigate that reduces stress responses elicited by cognitive load and cognitive dissonance arising from uncertainty.

Inevitably, we do everything to boil problems down to something that we perceive as manageable and predictable which manifests itself through the substitution bias which inevitably creates errors[13]. Looking at a mentally complex problem, we tend to break it down into simple problems that we think we can solve. This reductionist approach leads to solving the wrong problem precisely and risks united consequences. It is a common error which is discussed in more detail as Type III or γ – error by Patrick T. Hester and Kevin MacG. Adams in their book ‘Systemic Decision Making’[14].

After all, the whole problem is more complex than the sum of its parts in this is what the domain of complexity research is concerned with.

It is a world of self-organizing, emerging patterns with many self-reinforcing and diminishing feed-back loops that are path-dependent and meta-stable. Cause and effect are not clear. Hysteresis makes these dynamical systems irreversible in time.

Linear thinking and the assumption that the analysis of the past will help to predict the future is futile, since new and unknown patterns may emerge that haven’t been seen in the past, depending on prevalent endo-or exogenous system perturbations. Only through iterative probing and multiple perspectives can we solve these systems based on our subjective reality, which contrast with the assumption of one singular objective reality implied in a linear, ordered world as discussed above.

We need to accept that order is dynamic in nature and more complex than we like to assume.

Order is a state of synchronization depending on an order parameter we encountered in the logistical map called δ. Order can be persistent (dysfunctional synchronization) transient (intermittent synchronization) local (individuals, dyads) or global (entire system). The local level influences the global level and vice versa through reinforcing and counterbalancing, diminishing feedback-loops with various degrees of strength.

Effective family governance needs to address both domains – the basic assumptions of order, rational decision-making, and intentional behaviour (mechanistic view) as well as the domain of complexity, which is the ontology for organisms like social systems.

A plethora of best practice literature for corporate and family governance based on the mechanistic world view already exists.

In this paper we investigate how we can embrace complexity and ‘manage’ the social system effectively and sustainably by influencing its trajectory and create better outcomes on a spatio-temporal scale.

Synchronization and Chaos

Synchronization is formative for social relations and promotes rapport (Chatrand & Basgh, 1999, Dijksterhus, 2005)[15] and is the most important factor in transegrity.

Thus, the capacity to achieve synchronization is important for culture and society, but there are various definitions of synchronization[16].

The narrowest definition of synchronization pertains to the binding of distributed constructs formed transiently in response to stimuli adjustment of the trajectories of 2 or more non-linear oscillators. Over time, the trajectories merge into one single trajectory by a so-called fixed-point attractor [FPA], however this is a narrow and static definition.

The most suitable is the Amplitude-Envelope Synchronization (Gonzales-Miranda. 2002)[17]. It is the weakest form of synchronization where the coupled systems x(t) and y(t) are resonating on the same frequency when they synchronize. The systems must have at least 2 oscillatory frequencies in a way that e.g., the beat frequencies coming from the sum of 2 waves having slightly different frequencies.

All synchronized systems feature asymptotic stability, i.e., once the synchronization state has been reached, the effect of small perturbations is rapidly dampened by balancing feed-back loops, and synchronization is recovered again, implying freedom degrees in the system for intermittent synchronization. This is different for pre-synchrony states, i.e., when x(t) and y(t) are not synchronized. Small perturbations are amplified in time and can tip the system easily into chaos[18].

This phenomenon can be measured by the Lyapunov exponent λ, which also measures the ‘butterfly effect. That is, when a butterfly flaps its wings in China, a Hurricane emerges in New York when this exponent assumes positive values.

λ measures the mean convergence and divergence of 2 neighboring system elements resp. their trajectories in a dynamical system[19]. Let 2 trajectories originate from 2 infinitesimal close initial conditions x₀ ∧ x’₀.

When the trajectories diverge exponentially, the system exhibits chaotic dynamics and is highly sensitive to the initial condition, i.e., the infinitesimal difference at the beginning has huge impacts over time. In line with this paragraph, we can interpret the control parameter as |δ| = x₀ = x₀ – x’₀

Differences can arise from miscommunication, ever so small differences in what the sender intended to convey x₀, and the receiver perceived and interpreted x’₀.

• if: λ < 0 : the 2 trajectories are attracted by a fixed-point attractor [FPA] or limit cycle attractor [LCA] and the trajectories converge – misunderstandings can be neutralized.
• if : λ > 0 : the 2 trajectories are not attracted by an FPA or LCA. Rather, they are sensitive to the initial condition δ and diverge exponentially- small misunderstandings lead to major issues in a short time period.

Thus, a synchronized system corresponds to a negative Lyapunov exponent λ < 0 indicating a non-chaotic system, and a desynchronized system corresponds to λ > 0, indicating a system prone to chaos[20]

Our definition of synchronicity includes compensatory dynamics – energy deficits or surpluses in the system are being levelled out to the extent that λ < 0.

 

Synchronization: emerging property minimizing social transaction costs on a spatio-temporal scale

 

Synchronization is the antecedent for functional, social systems of utmost efficacy and transegrity to create sustainable, transgenerational social capital and it is key in reducing the probability of unproductive, relational as well as task- and process-conflicts. A state of synchrony tends to prevent conflicts resp. favours a collaborative conflict management style leading to a productive outcome in case conflicts ensue. This is important because conflicts need to be sorted out in current generations, because inherited, transgenerational conflicts are a negative and resilient X₀ that creates chaotic attractors for the then current and future generations.

However, permanent, and highly intense synchronizations on a spatio-temporal scale are not conducive to create a functional social system with efficacy and transegrity.

Intermittent synchronization

Performance of a functional social unit needs cooperation of elements of the system which presupposes a form of synchronization. Synchronization arises from the mutual influence through consistent and congruent signals from one element to another to coordinate temporarily.

Synchronization plays a crucial part in the emergence of functions in relationships and promote effective group-performance. But global and persistent over-synchrony can be even dysfunctional e.g., when dyads fall into a relational trap, i.e., are bored of one another start conflicts just for the sake of being felt and heard. Epileptic seizures are example dysfunctional synchronization of neurons in the brain[21].

Dysfunctional synchronizations are evident at a social system level e.g., in ‘cabin fever’ situations or, groupthink dynamics[22]. Over-synchronization inhibits self-correction mechanisms via constructive criticism, the power of diversity and the generation of collective intelligence. It can lead to deindividuation by exchanging own identity for the group identity and engaging in collective rationalization of events, losing the ability to take different perspectives and the tolerance towards discrepant points of view as all the energy is directed toward group coherence. It predisposes group members to incongruently agree with one another by implicit or explicit coercion (peer-pressure), fosters the eco-chamber effect, favours in-group bias and polarizations which inhibits the emergence of collective intelligence. Moreover, this makes the system inefficient, rigid, and fragile.

People with a fixed mindset are often looking for quick, cognitive closure, make fast judgements and do not exhibit and active open mindset or a permanent state of learning. That leads to rigidity which can be detrimental for the individual and an entire social system when it is stuck in its tracks as described above. These systems lack adaptation capacity, oscillate on low frequencies and are more prone to chaos as they lack freedom degrees and are unable to create adaption capacity.

These patterns of dysfunctional pattern can also be observed in business family enterprises, where unconditional love and belonging lead to family blindness in a flood of oxytocin release.

Paradoxically, oxytocin can have these adverse effects of over-synchrony. It is an endocrine that is secreted when we feel that we belong and are loved, e.g., a touch, a hug, and someone speaks our ‘love language[23]’ or we feel the expression and expectation of unconditional love.

It increases trust and cooperation resp. reciprocating with a sense of shared obligation, and it makes us more pro-social, even charitable and initiates more sensitive and responsive to social cues and creates fuzzy feedback loop and supports bonding processes. It inhibits the central amygdala and thus, reduces fear, anxiety, stress activating the parasympathetic nervous system. It fosters social connections and is known to excite the Temporal Parietal Junction (TPJ), implicated in the theory of mind (ToM), improving social skills and processing social information more accurately[24]. Thus, oxytocin secretion contributes to psychological safety.

Overdosing oxytocin by nasal injection is implicated in having adverse effects, as the in-group cooperation is increasing but non-cooperative behaviour and even aggression towards out-group members increases, a phenomenon Robert Sapolsky calls ‘Us-Theming’[25], favoring in-group members and hating out-group members, blocking off any disconfirming, critical information.

Another example of over-synchronization with reinforcing positive feed-back loops was recently researched and published by Nadine Kammerlander and Julia K. Groote[26]. Looking at the past trajectory and path-formation of family businesses, they asked the question of organizational path dependency.

Path confirming behaviour is linked to positive reinforcing feed-back loops which is akin to over-synchronization and path-breaking – which manifests itself in agile responses and proactive action implies freedom degrees that allow desynchronization from previous paths that can result in better economic outcomes vs. those families who stayed on their path because they adapted the business model to the current and future challenges.

The former is an example of an external fixed-point attractor, a higher order structure that demands mutual consistency of elements on a lower level in evaluation that has lost evaluative elasticity and describes a state in which the system will resist forces that perturb the system – it is the wrong kind of resilience, the latter is a situation where the system gravitates towards a different attractor resp, the former external attractor turns into a Repeller, allowing the system to change trajectory. The system exhibits meta-stability.

Ironically, path-breaking behaviours are a form of collective action which implies strong synchronization of the social system behind this change of path. The internal attractor in the family that forms a functional social unit makes this collective action possible.

Synchronicity should be more ephermal and sequentially reoccurring rather than a permanent feature on a local level[27]. In other words, it needs freedom degrees in order to prevent the system from tipping into chaos.

Intermittent synchronization is also a regular phenomenon in the brain, whereby bursts of synch form coherent representations of perceptions and for actions resp. responses to stimuli. But also, on a social level in dyads, and societies to perform a specific task followed by a desynchronization after the task is completed. This readies the system for a different task for which a resynchronization takes place. The system forms various task specific functional units, which is a structure that performs momentarily functions and may never reassemble in the same configuration (hysteresis). The purpose of these functions is not necessarily obvious or conscious, yet they still have a purpose, otherwise they wouldn’t be performed.

For instance, empathy, the ability to simulate other people’s emotional states empathy is an essential function for human connection and synchronization of higher order. The state of empathy is a functional unit created by the brain through synchronization of neurons and the state of empathy does not require conscious awareness.

A recent study[28] found that empathy, is induced by synchronized, neural oscillations in the right hemisphere in the brain (rACC – right anterior cingulate cortex involved in error detection and rBLA -right basal-lateral amygdala, involved in threat detection and fear responses).

 

Operationalizing synchronization by coupling of logistic maps[29]

$x_1(t+1)=\frac{{\delta }_1{x}_1(t)+(1-x_1(t))+\alpha {\delta }_{1}x(t)+(1-x_2(t))}{(1+\alpha )}$

$x_2(t+1)=\frac{{\delta }_2{x}_2(t)+(1-x_2(t))+\alpha {\delta }_{1}x(t)+(1-x_1(t))}{(1+\alpha )}$

 

0 < x_1,2 ≤ 1 : Value of behavioural outcome of person 1 respectively 2

x₁(t + 1) : Value of outcome of joint action performed by person 1 and 2 coupled by

0 ≤ α ≤ 1 : average coupling parameter indicating strength of mutual influence

0 < δ_1,2 ≤ 1 : internal states of persons

Simulations showed, strong influence (high α) promotes quick and perfect synchronization on a superficial/behavioural level only after a few iterations but runs the risk of the dyad not synchronizing on a deeper level by sharing internal states.

In a family enterprise context, a high average  could be the m/patriarch coercing everyone to comply and cooperate according to his or her agenda which can have negative implications for the trajectory of the social system.

For weak influence (lower average α ⟺ introducing fredom degrees) there was a tendency for the individuals to achieve greater stability and regularity in social patterning and less chaos in their respective behaviours and synchronize on a deeper level with internal states[30].

Thus, weaker but more frequent synchronization is more sustainable and can be achieved by regular family meetings.

Frequent social interactions promote synchronization and attractors in individuals’ emotional-cognitive system that promotes consistency in behaviour.

The resulting inter-brain synchronization promotes social interaction and pro-social behaviours, but a steadily strong influence is not necessary to promote interbrain synch, but it is enhanced when there is an emotional context for social interaction. (Nummenma et. al. 2012)[31].

Performing joint tasks synchronizes brain regions associated with perception of intention and the Theory of Mind (ToM) like the dorsal-medial prefrontal cortex (dmPFC) and the temporal-parietal junction (TPJ), motor cortexes (including pre-motor cortex) and at a deeper level like intentionality, goals, values, and emotional states resp. empathy through positive reinforcing feed-back-loops.

The inter-brain connection and synchronization is possible through mirror-neuron system in our brains. The mirror neuron mechanism is thought to be involved in action and intention understanding[32].

The mirror neurons start oscillating which develops into anticipatory coding and predictive perception, where a behavioural signal of the partner elicits the correct prediction of the next move, which is essential for the coordination to perform rapid complex tasks like dance or playing music. Fast switches between anti-phase (coordination of opposite movements) and in-phase synchronization (coordination of equally directed movements) are required, which works best in a positive emotional context.

Dancing happens between dyads on a local level and a on a dance floor on a global level when dyads navigate the floor and avoid collisions with other dyads. Individuals synchronize on a task (local level) and synchronize to a higher order as workgroup through progressive integration, where individuals find resonant states based on time and phases delayed feed-back and feed-forward loops that are oscillating with harmonious frequencies[33].

The integrative role of synchronicity is a matter of frequency of synch phases which are also observed in the brain between neuronal assemblies.

The working memory in our brains requires regions in the hippocampus and the mPFC, where neurons synchronize in the theta band (4-10 Hz) with dynamic synchronization that peaks in the actual decision-making phase and when the right (i.e., congruent) decision is made. Wrong (incongruent) decisions have a de-synchronization effect.

This oscillation of neuronal assemblies provides dynamic neuronal processes (Singer 2018)[34] which allows for an active open mindset, a growth mind-set, and a state of ‘perpetual beta’ to learn, which is s social construction process and integrate new and novel information.

Synchronous oscillations are happening in monkeys and humans during cognitive processing and learning which rewires the brain according to the Hebbian Learning Hypothesis[35]: ‘What fires together, wires together’ in the brain. This is analogous to social systems that have sufficient adaption capacity, oscillate on higher (resonant!) frequencies and are less prone to chaos as they can create freedom degrees.

In general, the optimal level and frequency of synchronicity is the necessary condition for effective family governance, because in a state of synch, family members are more likely to be committed to the cause (commitment culture).

The social system synchronization needs to be curated to strike the optimal balance between creating a feeling of belonging, psychological safety, a space where people are willing to take socio-emotional risks, and collective goal orientation with the flexibility to retain agency and agility on a local level with openness and curiosity.

Attractors are a great way to achieve functional synchronization.

Attractors

Attractors and their counterparts – the repellers are specific domains within the general state space of a system. They come in forms of single points (fixed-point attractors FPA) or a set of point (limit cycle attractors LCA) and describe how the system evolves in time close to the attractors. LCAs are important factors in neurosciences, social sciences and many other natural sciences like chemistry and biology[36].

FPAs define a state space where the amplitudes of perturbed systems decay in time and return to the initial state, at least for small perturbations, but not necessarily for large perturbations.

LCAs are not single points like FPAs, they are closed lines (circles) like an orbit. Either the system is spiraling out from the center (X₀) and is limited by the circle, or the system is converging upon the circle from an initial condition outside the circle.

The state of the system will evolve along this circle-line, i.e., all points will be touched over time. Thus, LCAs is a temporal pattern describe oscillations, for instance like the spring of a watch. The system will converge in either case, i.e., it will never touch or become the attractor. Attractors emerge, depending on the initial condition X₀ which can be set[37] by e.g., the family system on a macro level and by the individual on a micro level. System behaviours are depending on attractors and repellers that are set by X_0.

The asymptotic point attractor can also be interpreted as a limit cycle attractor that naturally allows for intermittent synchronization. To which the attractors the system will converge on depends on x_0. Thus, the family should work on their x₀ for appropriate limit cycle attractor to emerge on a global level.

Chaotic Attractors

A chaotic attractor is unstable, dysfunctional and creates chaos, depending on the initial condition X₀. The system is characterized by λ > 0. The Lorenz Attractor is a representation of that.

In a 3-dimensional system like the 3 circles of a family enterprise as discussed above and which is highly sensitive to the initial condition, creates trajectories in the shape of loops of different sizes and it unpredictably jumps from left to right – never visiting the same state twice. It is creating a strange picture like the eyes of an owl. Thus, it is called a strange or – simply put – a chaotic attractor[38].

Graph 2.1 Lorenz Attractor[39]

In a family context, this chaotic or strange attractor can be interpreted as ‘money attractor’. When the initial condition is set in way that a ‘money attractor’ emerges, the whole system will evolve around money and the relationship people have with it.

It is a fragile system that will not have sufficient adaption capacity for even very small perturbations as discussed above.

The family business researchers Peter Jaskiewicz and Sabine Rau[40] -confirm that financial wealth without purpose (a functional attractor) is a poor glue to keep families united and happy It fosters entitlement and elicits compensation strategies to fill the purpose-gap as this context denies family members a meaningful life

Thus, it is very important to change x₀ so that functional attractors can emerge and synchronize the system for high adaption capacities.

Synchronisation effects

Synchronization between brains e.g., through behavioural synchrony promotes social interactions and shared emotions and shared intentionality which form reinforcing (diminishing) feed-back loops. of periodic synchronization, which introduces a vital property: self-regulatory control (Waddell & Zochowski, 2006)[41].

It forms a functional social unit defined by mutually meaningful relational patterns that create a coherent group identification and impart purpose at a higher order level and provides meaning and integration for lower-level identities (micro-level).

The outcome of a diverse but synchronized group is superior to a homogenous group or a group that is not synchronized but diverse, as the diversification benefits, such as noise cancellation and bias reduction are unused. Diversity can even create frictions and tensions that lower output.

A functional social unit is an irreducible entity with its own characteristics resp. dynamic properties, the very features family governance and family constitutions are attempting to achieve.

Family constitutions can be a manifestation of the substitution bias, as it is a seemingly simple solution to a complex problem. Solving the wrong problem is tantamount to not solving the actual problem at all. The family constitution should align the family system and is a context dependent structure, often designed to control the outcome of the social system and thus, it favours a compliance culture on a micro level as rules and regulations are individually interpreted. That carries an inherent trade-off problem, described by the ratio ω :

Equation 2:

ω = \frac{e[U(x)]}{E[U(y)]}

x : non-compliant action; y : punishment if get caught

• ω > 1 : The expected positive utility from norm violation exceeds the expected negative utility of punishment => non-compliant action will be performed
• ω < 1 : The expected negative utility derived from punishment for norm-violation exceeds the benefits => non-compliant action will not be performed
• ω = 1 : indifferent

Inevitably, the evaluation of ω is shaping behavioural tendencies on a micro level and finally, on the macro level.

A commitment culture within the social system is equivalent to ω → 0 . The level of commitment can be interpreted as x₀ from which a functional attractor emerges which helps synchronizing the system – THE necessary condition for effective and sustainable family governance as it allows for higher-order integration because it minimizes the social transaction costs in the system.

Furthermore, commitment and compliance are in a reflexive relationship and create a positive, reinforcing feed-back loop. People who are committed to the cause comply, are accountable and exhibit responsible behaviours, and being compliant feeds their commitment because they feel, they have done the right thing and they can observe compliance in other’s behaviours, which is validating their own behaviour.

The family constitution is thus merely the sufficient condition for effective family governance that is complied with based on the necessary condition: commitment.

Information and communication

A social system contains elements that coordinate by means of verbal- and non-verbal communication or for short – by signals [signaling network].

Communication is the mediation between interdependent spheres and translates between the original impulse to re-create its intention and original meaning with a self-reflective element between syntax and semantic in a way, that another person receives the intended meaning.

Communicative coupling of social systems requires channel capacity as a medium to get the information across to the receiver in an unambiguous way – i.e., free of noise.

Noise in Swarms

Swarms are collectively moving individuals that are self-organizing (with relationships at the root), complex, dynamical / adaptive systems consisting of are agents that perform a task that outperforms the ability of the individual agent and can be described as a cascade of topology dependent emerging phenomena.

The information processing capabilities of a swarm are at the core of global ordering by local interactions, which is vital for its behaviour i.e., for the initial configuration and re-configuration in response to perturbations. It involves all sensory modalities and differences in perception.

To achieve the collective behaviour, the quality of information distribution and transmission channels are vital, i.e., a sufficient, accurate and reliable information flow is paramount for coordination and collective action, and it increases the perceptual, radial range of the swarm-organism vital for the creation of collective intelligence. Information are signals in a signaling network that drive dynamics. It shapes and reshapes the network according to the current requirements and aswarm is a networked-control system for collective computation and decision-making. Information flow becomes the limiting factor for the ability to self-organization and swarms collapse due to signal disruptions as swarm dynamics are coupled to local signal detection and global information flow, depending on one agent send the information and the other agent’s capability to interpret and infer the correct meaning of the received signals that are reinforced or diminished through feed-back loops for the propagation of information through the system.

The quality of the signal transmission is at the core of these mechanics. Every signal has deliberate and undeliberate content that is subject to social evolution.

Stimulus and response noise (often undeliberate content) are signals that perturb the dynamic of the system, depending on noise levels and the system density[42][43].

Let φ be the alignment parameter with φ → 0 indicating that the system fails to organize (disorder) and φ → 1 indicating the system self-organizes (order).

The level of noise is represented by η and the network density by ρ = \frac{N}{L^{2}} of self-propelling agents (particles) moving in a 2-dimensional space i.e., L x L.

Graph 3:

The graph below shows the various of average alignment measured by φ depending on noise levels η for various densities ρ:

 : ρ = 4
 : ρ = 2
+ : ρ = 0.4

This experiment shows how noise inhibits signal propagation and impacts on the alignment of the agents. The lower the density of the network the more susceptible it is to noise measured by the average alignment φ.

We can interpret ρ as synchronization proxy, which has communication and information transmission at its core.

Intergenerational communication or the lack of it has been identified as a significant impediment and limiting factor in succession-transitions resp. transgenerational leadership change[45]. The quality of relationships in a social system are a function of meaningful communication, frequency and duration which leads to trust and commitment. The absence of communication inhibits trust building, leads to false assumptions and frustrated expectations based on very different, subjective mental models of the world, a situation conducive to unproductive conflict.

Hence, it is warranted that we investigate the subject of noise in information transmissions.

Channel Capacity and Information Entropy

Claude Shannon[46] reformulated this problem into one of communication reliability, which is a function of signal strength S, bandwidth W and the noise N within the communication channel:

Equation 3[47]:

$C=Wlo{g}_2[1+\frac{S}{N}]$

Synchronization impacts positively on the bandwidth W, reduces N and hence, allows even lower signal strength to travel as a unit to its destination. It is noteworthy that the noise term is logarithmic, meaning its contribution to channel capacity is asymmetric. One unit of noise reduction has disproportional impact.

Graph 3.1:

The y-axis depicts the noise-adjusted signal strength of 5, the x-axis the units of noise level with W =1. W is a scaling factor of channel capacity that can be interpreted as perception range of individuals. The higher W, the more information with various degrees of noise can travel.

In a social context this could mean quiet voices that normally wouldn’t get heard but they can be equally frustrated and reactive. Alternatively, a low level of W means people don’t perceive 100% of the information presented because of the lack of bandwidth.

It can lead to information asymmetries and misunderstandings causing reactions with unintended consequences and even tip the whole system into chaos when the system is chaotic i.e., Lyapunov positive ( λ > 0 ) Information asymmetry is one of the major issues in personnel selection processes in the corporate and family business world i.e., successions[49].

Information flow in a network is a function of 2 different channel capacities i.e., edges and nodes[50]. Noise emanates from the sender can be exacerbated by the transmission channel, and the receiver, whose perceptual biases may introduce noise, e.g., by differences in sensory modalities, cognitive and emotional noise arising from the information processed and the behavioural responses, i.e., how the responder interprets and reacts to the perceptually biased information which is another source of noise from the responding sender of information.

E.g., a simple difference in bandwidth can create a situation where tiny difference in the sent signal and perceived signal lead to massive system perturbations if the system is highly sensitive to the initial condition:

Equation 3.1

W _sender > W _Receiver => C _sender ≠ C _receiver

• W_sender: Family CEO speaking about the business with full bandwidth
• W_receiver: Family member doesn’t have bandwidth for business dynamics, is overwhelmed, feels like an idiot, and doesn’t dare to ask for clarification, fearing the same situation equation 3.1 is describing i.e., the family CEO doesn’t have the bandwidth to listen to his or her questions and concerns without judging.

It reminds us of the small differences in the initial condition |δ| = X₀ = x₀ – x’₀ from which 2 close trajectories start (1^st trajectory: sender and 2^nd trajectory: receiver) and that we discussed above under the headline ‘Chaos’, i.e., when the system is λ > 0.

It describes the fact that noisy communication process is a reinforcing feed-back-loop and hence, noise in a social system does not cancel out – it aggregates[51] exponentially and can tip the whole system into chaos  A well-constructed noise-audit will provide valuable information about biases, blind spots, and specific deficiencies in the social system[52] in a bid to implement countermeasures (diminishing feed-back loop) that allow for a transition towards λ < 0.

But even if the communication channels are clear, congruent, and wide open, surprises can happen as the information is ambiguous and uncertain resp. deliberate or undeliberate. ‘The fundamental problem of communication is for the receiver to be able to identify what data was generated by the source, based on the signal it receives through the channel’[53], pertaining to the freedom of choice in constructing communication and the resulting congruency of signal intention and signal interpretation.

This is the so-called ‘Shannon Information Entropy:’

Equation 3.1

$H=-{\sum }_n^{i=l}{p}_i(x)log{p}_i(x)$

H is the entropy, and p the probability distribution of information x. ‘

The entropy of a process measures the unpredictable part of an information process which is linked to the channel capacity. Synchronization influences p_i (x) e.g., through a higher signalling rate which strengthens the signal and if consistent as it pertains to the learning a dyad experience through interaction.

Entropy and channel capacity are important factors for the communication flow in complex systems[54].

Thus, before erecting the family governance edifice, the family needs to create communication reliability and reduce communication entropy in order to create a resilient base by the way of social system synchronization.

In a synchronized system, signals are more likely to have congruency between what the sender is sending, and the receiver is receiving which reduces information asymmetry.

Critical information transpires much quicker and more reliable through synchronized systems, informing higher order structures and vice versa, which is evident in swarm intelligence. Peripheral information travels quickly across the swarm elements like in a flock of birds. Based on a wide perceptual (radial) range which is greater than the interaction range, the swarm opens to circumvent an obstacle or predator, just to regroup quickly after the navigation is complete and move on in the direction of travel at the same time.

Neglecting that, risks the family to collapses when the earth starts shaking induced by endo- or exogenous shocks induced by tension build up followed by knife-edge – tension releases upon suitable triggers. The system trajectory is no longer smooth and continuous.

The family governance edifice may even counteract ‘transegrity’ as it is conducive to tension-build-up resp. tension release and is increasing the amplitudes of the earthquake (reinforcing feedback-loops) because of missing freedom degrees and λ > 0, a cause we alluded to earlier as ‘the perverted outcome of family governance’ (A. Hirschmann).

A high channel capacity – level implies high communication reliability and in combination with low entropy, it increases the level of effective communication, which reduces misunderstandings created by noise or narrow bandwidth and thus, it is conducive to reducing (perceived) information asymmetries, which is a major cause for unproductive conflicts in social systems. This can be achieved through system synchronization.

Communication reliability (and low entropy) is a necessary condition to create shared meaning space with a high degree of signal congruency, which in turn, allows for the creation of a shared reality.

This shared reality is a prerequisite for the system to take collective action as functional social unit.

Synchronizing Mental Models of the World

The mental model of the world [MMoW] is a 3-tiered, cognitive infrastructure that creates our subjective reality. It is responsible for our epistemology and phenomenology on a cognitive resp. emotive level.

It is important to remember that we are all travelers and mapmakers at the same time[55] and in this context, it is conceivable that 3 levels are reflexively connected[56], and we can interpret the MMoW as dynamical complex system

The emergence of a MMoW is based on experiences that are a function of communication, perception and interpretation of social and contextual cues presented. The temporal space stretches from pre-natal experiences in mother’s womb but even beyond through transgenerational epigenetics (we inherit stories) to experiences made in the past and retrieved and reinterpreted in the present moment in combination with presented stimuli in that present moment, and expectations about experiences and outcomes in the future.

The lowest level (micro level) is the executive stage where we relate known facts and unknown facts about the world in the context of our mental state, perceive and interpret encoded sensory input, engage in meaning making, conceptual thinking, simulate and predict, dream and reason about the world and act on resp. react to subjective information cues.

The meso-level is responsible for corrections, neurologically driven by the anterior cingulate cortex, [ACC] which is active during error detection in our brains. This level performs the updating (revisions, additions, eliminations) of the micro-level and is responsible for e.g., Bayesian learning as well as other forms of learning such as imitation learning and observational learning.

The structure controlling the meso- and micro level is the macro level -the highest order of the MMoW. It is involved in self-regulation and the failure of it (dysregulation). Regulation includes monitoring and controlling cognitive and emotive processes. It coordinates the meso level by giving permission to change i.e., to learn and unlearn as central adaptions via meta cognitions and it is selecting various sub-MMoWs μ_i depending on context, which can be created by symbols and attractors (contextualization and recontextualization).

Equation 5

μ_i ∈ Μ

M : The total, subjective mental model of the world
μ_i : sub-mental models

Synchronization changes the social context in a way, that more and more system elements choose a greater overlap of their mental models resp. create a new and joint, emerging model specifically for the family enterprise [FE] or even beyond the FE context.

Equation 5.1 shows the synchronization state of 2 MMoWs:

Equation 5.1

${\mu }_{FE}^i\subseteq {\mu }_{FE}^k\iff {\mu }_{FE}^k\subseteq {\mu }_{FE}^i\to M^i\subseteq M^k\iff M^k\subseteq M^i$

${\mu }_{FE}^i$ : family enterprise specific MMoW of person i (micro- and meso level)
Mⁱ : (macrolevel)

To understand the risk of de-synchronization, again, we can use the model of small differences in the initial condition $|\delta |=X_0=x_0-x_0^{\prime }\iff {\mu }_{FE}^i⊈{\mu }_{FE}^k$ i.e., 2 close trajectories start (1^st trajectory $x_{0;{\mu }_{FE}^i}$ and 2^nd trajectory $x_{0;{\mu }_{FE}^k}$ and when the system is λ > 0.

The MMoW synchronization must take place in a psychologically safe environment, and, at the same time, synchronization nurtures psychological safety[57]  across all levels to achieve the greatest effect with the greatest leverage possible. It is setting X₀ in a way that a stable LCA emerges.

The satisfaction of equation 5.1 is paramount for semantic synchronization, i.e., a shared meaning space, where the level of ambiguity in communication tends to be zero. That is the antecedent for a shared reality, which we can describe as a space that emerges through the combination and recombination of synchronized individual realities. Shared meaning space and shared reality enter a positive, reinforcing feed-back loop.

A shared reality helps to navigate complex environments and to learn as a social system. It makes it anti-fragile.

The term ‘anti-fragile’ was introduced by Nassim Taleb and describes a system that thrives and learns in world of VUCA and improves with shocks. Thus, it goes beyond the robustness or resilience of a system. Antifragile systems can even navigate in disordered environments that resemble chaos.

“Simply, antifragility is defined as a convex response to a stressor or source of harm (for some range of variation), leading to a positive sensitivity to increase in volatility (or variability, stress, dispersion of outcomes, or uncertainty, what is grouped under the designation “disorder cluster”). Likewise, fragility is defined as a concave sensitivity to stressors, leading a negative sensitivity to increase in volatility” (Nassim Nicholas Taleb) [58].

A shared reality is both – an outcome of synchronization and a reinjection into synchronization, creating a positive, reinforcing feedback loop of higher order.

Synchronization methods

Synchronization occurs naturally without further ado but also can be curated and nudged into a specific direction by giving system elements the illusion of choice by creating a choice architecture which has been researched by the behavioural economists Richard Thaler and Cass Sunstein[59].

Nudge is a departure from coercive paternalism, more like a ‘libertarian’ paternalism. It is leading by incentives [attractors], nudging people while preserving the perception of freedom of choice to make the desired and required choices themselves which increases commitment through the self-consistency bias.

Spontaneous Synchronization

Synchronization depends on the topology of the network[60], which we described as x₀.

Individuals are predisposed to synchronize (even spontaneously) with regards to action and internal states, a basic tendency of collective behaviour in a shared reality. When cooperative behaviour emerges and everyone realizes the benefits of it, it can form a strong attractor that synchronizes the social system and introduces social order based on information exchange and reciprocal behaviour. Once a moral system has emerged out of initially self-interested cooperation and the will to promote order and organization, people exhibit self-sacrificing cooperation[61].

Herding is also a form of spontaneous synchronization in the light of risk and uncertainty e.g., a predator challenging individuals or stock market investors who synchronize around the fear of missing out or panic selling their portfolios after news trigger a great deal of uncertainty for future, discounted profits of equities. Even pendulums and metronomes can synchronize as coupled oscillators over time, so do fireflies, heart- and breathing rates, menstruation cycles etc. synchronize when dyads get on well[62].

Collective Action – A manifestation of Social System Synchronization

Collective action is a manifestation of collective intentionality which presupposes that everyone understands individual intentionality, which implies the requirement for functional synchronization.

Martin Kornberger illustrates in his book ‘Collective and Distributed Collective Action’[63] a collective action performed by a refugee help group called ‘Train of Hope[64]’, a self-organizing phenomenon based on spontaneous synchronization.

Kornberger identifies 4 models for social system synchronization and collective action:

1. Invisible hand (self-organized by self-interested market forces)
2. Visible hand (driven systems by command and control)
3. Institutions (social norms, rules & regulations creating expectations)
4. Grassroot (emerging attractors)

Adam Smith introduced the term ‘Invisible Hand’ to describe the process of self-organizational behaviours of market mechanisms whereby collective goals are achieved while individuals focus on self-interested behaviours which can lead to inefficient outcomes and market failures.

On the other and of the spectrum is the Visible Hand. It epitomizes the mechanistic world view based on the scientific revolution driven by Rene Descartes and Isaac Newton etc.

Thus, the Visible Hand is a synonym for driven systems (as opposed to self-organizing systems), whereby a planner at the top of the hierarchy sets goals and directs, oversees, and coordinates collective action with managerial command and control with the help of deputies to create a well-oiled machine’. This is the linear, mechanistic world view Frederic Taylor[65] based his scientific management approach from the 1920ies – i.e., engineering collective action by scripted workflow and coordination implying fixed mindsets and the drive from protection against perturbations, a costly position because it makes systems fragile. Everything is process driven, mechanistic, thought up by top management and executed by the minions i.e., employees who are reduced to a commodity and denied their humanity. The mind is the management board, employees and their departments are the matter – or simply means to an end.

Periodically, the machine needs servicing and up-dating, which is termed ‘business-re- engineering’.

On a higher level, institutions shape collective behaviour trough global cultural norms interpreted on a local level and conventions based on the integration of collective rationality, whereby individuals on the local level contribute to the institution on a macro level which in turn, influences the relational patterns on a local level. However, this also invites free riders like. Individual rationality can create irrational, suboptimal aggregated outcomes.

Institutionalized practices take on moral legitimization that can become sacred to the community (see above: fixed point attractor for dysfunctional synchronization) and therefore introduce rigidity and fragility of the system as discussed above. Like the visible hand, the institutional model is limited in scalability.

Finally, there is a grassroot explanation for collective action, based on civil society movements based on ‘free will’ resp. choices.

Events that lead to common grievance and form shared identities is an example of self-organization corresponding to an attractor for collective orientation and distributed agency.

This functional synchronization needs an infrastructure, a choice architecture, i.e., X₀ for the emergence of a functional attractor:

1. Interfaces for clear communication between heterogenous sub-systems
   1. Shared mental model of the world
   2. Communication (sufficient channel capacity, low entropy)
   3. Shared meaning space and shared reality, inhabiting the same temporal universe.
   4. Psychological safety[66]
2. Architecture for participation and contribution
   1. Space for meaningful contribution
   2. Diversity and inclusion
   3. Grammar that embraces complexity and trying to reduce it
   4. Inviting commitment
   5. Strategies balance temporalities and are socio-cognitive infrastructure for collective reasoning to facilitate collective action. Strategies and Models test the metal when they interact with reality where the group needs to straddle the shores of planning and emergence. Adaption capacity i.e., flexibility and agility are needed to navigate more than the strategies or model that haven been hatched at the beginning of the process.
3. Shared values & beliefs, a global cause, shared concern, meaning and purpose. These are attractors that exert centripetal forces (attractors) overcoming centrifugal forces (repellers) in the system. A manifestation of an attractor are often physical or meta-physical symbols. Symbols are relational constructs between mind and matter. Narratives can also become symbols that inform and energize collective action and are the most important device for it.
4. Evaluative infrastructure for feed-back loops as coordination and synchronization are reliant on it by the way of communication.
   1. Constructing phase space of what is possible
   2. Reducing information asymmetry
   3. A-posteriori evaluation – no a-priori evaluations for feed-back loops
   4. Active open mindset, group learning
   5. Collective control, responsibility, accountability

Albeit scalable, the danger is the dysfunctional over-synchronization.

Oscillations are thus vital for the social system to change direction just like a swarm flying towards an obstacle and deals with the matter in a self-organized swift reaction to navigate the difficult territory with agility resp. fluency and at high speed. This is tantamount to functional (intermittent) synchronicity required for collective action and group agility.

Collective action in turn, strengthens the synchronization effect in a positive feedback loop.

Curated Synchronization

It is about creating the infrastructure or architecture for a functional attractor to emerge and to nudge the system towards a state of synchrony. Technically, curated synchronization is about setting X₀ for the appropriate attractor to emerge by introducing synch-elements x_0i with

Equation 6:

x_0i ∈ x₀

Specific x_0i have been document to promote synchronization in social systems e.g., by changing the network topology through the introduction of consciously constructed x₀, whereby the synchronization results are better (and more sustainable) with weak institutional authority[67].

Typical sources of attraction (or x_0i for functional attractors to emerge):

x_0i = {attitude similarity, physical proximity for thoughts, cooperative behaviours,…}

Synchronization may also be induced by traditional synch devices and external stimuli like playing music together, chanting, ritual dancing, marching in synch for perilous collective action like going to battle, a decision that may not be taken idiosyncratically, i.e., the group identity is overriding personal identity to form a functional social unit.

Transformative leadership

The leader’s task is to set the appropriate X₀ in a way, that an attractor emerges that synchronizes the social system into functional social unit with efficacy for collective action.

Thus, leaders play an important part in inducing states of synchronization with strong and frequent signals pertaining to positive internal states – especially trustworthiness and steps to creating psychological safety[68] a key antecedent of synchrony combined with a call for collective action and direction.

A psychologically safe space allows agents to take socio-emotional risks which leads to authentic signaling patterns with reduced noise and increased bandwidth. Psychological safety emerges through enacted leadership behaviours characterized by empathy, compassion, active listing without judgement[69]  resp. perceived vulnerability and appreciation[70].

Leaders must have profound knowledge and experience in mentalizing states of other people, exhibit a growth mind set[71] and need to be open for thought experiments i.e., detach ideas from traditional contexts of classical management styles. They need to have an active open mindset to understand and connect singularities, turning mere objects into intelligible experiences and see the Gestalt that is irreducible.

To navigate the social system on a local level, they need to apply diplomatic skills[72], i.e., tact – the sensitivity to social situations between cognition, emotion, and action and to connect values and culture sensually and intellectually by taking perspectives (social intelligence or SQ), which presupposes emotional intelligence – the ability to understand and control one’s emotions (EQ).

This contrasts with the traditional, patriarchal resp. authoritative command and control al a Frederic Taylor or even meritocratically achieved leadership positions by the virtue of knowledge and experience and performance, sometimes at the expense of others.

It is a collaborative approach, more akin to a coaching process that works with the individual on a micro-level and with the social system on a meso- and macro level by asking questions and creating a space that needs to be filled by the individuals rather than working against the social system.

This safe space is created by the leader’s active listening, a whole-body process with a wide, 360-degree perceptual range and focused attention with curiosity. Personal judgements need to be suspended, social comparisons, the impulse to jump to conclusions and solve problems while the other person is still processing need to be consciously suppressed.

Empathy is key to the process of creating safe space. It is the simulative, visceral experience of another person’s experience which gives the other person the permission to suspend self-judgement.

The process strengthens the self-efficacy of people in the social system for better connections and inspires them to find and discover answers to questions.

It is an investment in relationships that must be reciprocated to a degree. This is necessary because we are dealing with conditional relationships as opposed to unconditional relationships that only exist between mother and child[73]. This means that everyone in the social system must invest, but the leader is required to be the first mover by sending strong, frequent, and consistent signals pertaining to the matter. The level of information asymmetry is high in a psychological unsafe environment and the greater the skew, the greater the impact of signals. Mindful communication is key to nudge the systems’ trajectory into a positive direction.

One key signal is the understanding that it is not about the leader but about the social system s/he’s leading. It is a major mind-shift from the seemingly ego driven patriarchal driven approaches.

To be effective on a macro-level, leaders need to engage in dynamical complex system-thinking and understand feed-back loops, ripple effects and need to be catalysts for change by curating a safe space, a shared meaning space and a shared reality, connecting the system elements laterally, vertically and diagonally and cultivating the social system by sponsoring it on a macro, meso- and micro level for effective relational patterns in a way that the social system becomes a forceful functional unit for collective action with high efficacy. The social system will show agility and the ability to learn. They manage to transform a heterogenous group of agents into interdependent, synchronized agents that create collective intelligence and produce outcomes that a greater than the sum of its parts, which is dubbed by the NLP master and pioneer Robert Dilts as ‘generative collaboration’[74].

Narratives as synchronization tool

Narratives are very powerful in the world of family enterprises as to analyze and to gestalt them.

Narrative analysis is a powerful tool to understand social dynamics and relational patterns holistically as it addresses multifaceted and complex social constructs performed by various agents in different contexts honing into the various subjective mental models of the agents[75].

On the other hand, narratives are strategic devices[76] and play a significant role e.g., during transgenerational leadership change[77]. The ability of people to achieve coordination (and synchronization) in groups is enhanced by using scripts group members can act in accordance with (Shank & Abelson, 1977) or narratives (Lane & Correy, 2007; McAdams, 2001; Nowak, Kacprzyk, & Serwotka, 2016)[78].

The brain is an interpretative system, trained to perceive what it deems probable (predictive perception and validation) and narratives play a pivotal role in this process. Narratives impact on the brain’s probability distribution, especially in family enterprises where they frame transgenerational meaning making processes in the context of a multigenerational family history within serval contextual evolutions.

Thus, narratives are transformative as well as informative: they form, and convey individual and collective identities, legitimize successions and other phenomena, frame and align experiences, guide behaviours. They organize and shape perceptions resp. experiences, arranging and connecting internal resp. external data points which become meaningful and legitimate by the way of contextual interpretation. But narratives also contextualize and re-contextualize. More specifically, they weave patterns we use for shaping our subjective reality and thus, our orientation/navigation is based on the interpretation of social cues that are framed by subjectively emerging narratives. They even can induce symbolic meaning that travels beyond small groups to impact societies on a global level.

Thus, narratives are an effective tool to set X₀ and induce synchronization through the social construction of X₀ for a functional emerging attractor. When narratives become symbols, they are great leadership tools as they nudge the system towards synchronicity from different angles.

A narrative-symbol serves as strong attractor for the social system where the trajectories of individual group members converge on and synchronise beyond a merely functional unit. Narratives create shared feelings and experiences (synchronization of internal states), create a shared reality resp. identity and can be social change agents as well as a frame of reference. Narratives are crucially important to achieve coordination and to maintain coherence as they create shared attention and are prescriptive in guiding action e.g., by supporting synchronized anticipatory coding resp. predictive perception.

Narratives and their co-creation process play a pivotal role in synchronisation, social cohesion and transegrity during social change processes. In turn, social change processes influence narratives, which forms a complex system. Narratives induce and form social system evolutions with positive feed-back loop for a meaningful social interaction on a macro level and on a local level.

For further elaboration on the relevance of narratives for synchronizing social systems, we refer the interested reader to the Family Hippocampus paper ‘Narrative Embedded Family Governance’[79].

Conclusion

Synchronization is at the core of functional social systems resp. social system efficacy.

In this context, the ‘family first’ ideology seems to be warranted, but not in the exploitation frame. Ultimately, financial wealth is the result of the family’s non-financial assets (external and internal social capital, human capital with the competencies) and financial assets which are a non-linear combination that led to a thriving business.

Family and business are forming a complex system with mutual influences and form an irreducible Gestalt, a social system that needs perpetual investment. It is an organism that requires frequent impulses for synchronization. But this presupposes a ‘holistic mindset[80] which everyone in the family needs to adopt.

Synchronizing a social system is a bottom-up social system intervention which builds a resilient base for the family enterprise and its governance as it promotes agility of the system and even antifragility. It is a reflexive process with positive reinforcing feedback loops between the socio-emotional and cognitive dimensions. The synch process is initiated by creating a psychological safe space through leadership and progresses in conjunction with synchronizing the mental models of the world for a shared meaning space and to create a shared reality in a way, that system elements can co-evolve as a function social system, i.e., achieve high levels of transegrity.

Dynamical systems move on a spatio-temporal scale, so we only see snapshots of the system’s state at time . But the system is always in transition. When the system is fully synchronized in , in  it will have different levels of synchronization, owed to a combination of internal-and external (even ever so small) stimuli that nudge the system’s trajectory in all directions or even shocks that are perturbations of higher order and magnitude.

Thus, synchronization interventions are not a one-off task. Rather, social systems need regular synchronization-inputs in the various domains at optimal frequency and intensities , which are social system specific.

A synchronized system is characterized by high social efficacy and transegrity, i.e., it will build significant social capital because it is antifragile as it has sufficient adaption capacity and is less likely to tip into chaos. The adaption capacity is increasing with shocks as the system learns and thus, the system gets stronger, even in a chaotic environment because it features agility. It will have significant status signaling power, demanding valuation premiums in M&A transactions.

Conversely, a de-synchronized social system will not build significant social capital as has low social efficacy, is fragile resp. short of adaption capacity, cannot learn, is prone to chaos and it lacks status signaling power which may weigh on the family enterprise valuations in M&A transactions.

Top-down family governance does not necessarily create adaption capacity, it can even reduce it making the system more fragile than it was before. In the paper we propose a bottom-up family governance, focusing on social system synchronization to build a resilient base for a formal family governance edifice, that sustains shocks and helps the family system to learn and grow.

Summary

Business families are dynamical complex, social systems or organisms that are prone to endogenous resp. exogenous shocks that perturb the system’s trajectory. Upon shocks, the system enters a transition phase, and the outcome is a function of the system’s adaption capacity. It either fragments, tipping into chaos, is resilient or even antifragile.

In this paper, we conducted thought experiments how synchronization can increase the system’s adaption capacity to become antifragile and can form a functional social unit for collective action.

Acknowledgement

A major source of inspiration for this paper are ‘In Synch, by Andrzej K. Nowak et. al’., and ‘Strategies for Distributed and Collective Action by Martin Kornberger.

 

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This article series tackles facets on how nuanced interpretation and family narratives can support families in their efforts to reach enhanced communication and a solid governance, and, consequently, strengthen their legacy. A Plethora of Complexity The current pandemic-related uncertainties and more available critical time for reflections have been prompting multigenerational family businesses and their offices to run substantial restructuring and re-evaluation exercises, as well as to recalibrate their long-term vision and strategy. This crisis is not only triggering financial upheavals, cash challenges, but also new risks that are likely to threaten the patrimony of families in business. ^[1] In fact, it’s striking to hear from large business-owning families around the world, that they don’t think their family business will exist in thirty or forty years from now, at least not under their family’s control and/or leadership. However, this is not necessarily due to the pandemic, as it’s a well-researched fact that more multigenerational a family business is, the more resilient they are having had to succeed and innovate in different crises which fortified them with further strength. The number of increasingly disappearing patrimonies and family business succession failures have already been alarming for many years with only around 10 % of all family firms making it into a third generation and 3% to the fourth globally. However, it’s become even more critical to take serious action to increase successful generational transitions as we are in the midst of the greatest wealth transfer in history. The stake for families to succeed in their successions is vital to continue building on their legacy. As a result of these ongoing transitions, families feel an increased need to understand, and also interpret what’s behind their multifaceted family and business dynamics, various legacy milestones, traditions, challenges, broader value framework, responsibilities, goals, and aspirations. This important quest to make sense of it all and run such ruminations as individuals, as well as a family, will enable families better articulate their critical legacy patterns, sharpen key narratives and strategy points, and reinforce long-term alignment. Such exercises will also support the family’s soft landing into their future for generations to come. Historical Knowledge and Legacy Patterns Looking into family legacies, major multigenerational families’ history span over many decades and even centuries, e.g., when we think of members of the Henokiens, capturing hundreds or thousands of family characters touching upon various eras. Family business legacies don’t only correlate with geopolitical, economic, social, cultural, historic shifts, movements, and events, they also have many of their own family eras, their “familyisms”, along with their unique sets of patterns and overarching leitmotivs created by the most charismatic or influential family leaders. As an analogy, we could think of a family legacy as a Gesamtkunstwerk, a cornucopia of different melted and multi-layered compositions of various art styles, techniques, and art forms knitted together and running across epochs intertwined in vertical and horizontal overlaps. During the different family eras some styles or figures show a more dominant presence than others, so do the different protagonists and their legacy marks; e.g., the heads of the family and the ones who created, controlled, or shaped the overarching family narratives. These layered structures represent the iconology of a multigenerational legacy family with the entire historical, emotional, cultural, economic, and family context alongside with the iconography e.g., of the characters and their attributes displayed in a family’s history. Consequently, there is a whole archaeology and anthropology that we can unearth from each series of familyisms and how these are connected to the respective societies, cultures, economies, and the overall impact they had on them and vice versa. How do we capture the historic family members and their legacies, though? How can we unveil the internal dynamism, the interplay of the different figures, and how do we interpret these important findings? From Fusing Horizons to Co-Creating Firstly, we are facing the matter of atemporality; and its historic and subjective aspects of interpretation. Are the questions that family members pose themselves now would have been questions upon which their ancestors would have had a discourse? How do we engage with, decode, understand, and interpret any events, personalities, or stories in a chronological horizon? How can we step out of our perceived temporality to understand better contexts from different eras? How do we disregard any pretexts, historical insights, and presuppositions that we might hold whilst screening these and transcoding our observations? Especially, as these conversations happened in different formats, touched upon different contexts, and had potentially been driven by different intentions, social and economic, and cultural interest points. How approachability of historic traits may have an effect on our interpretation? How do we pose questions that would not have been self-evident in the selected era and how can we ensure not to miss touchpoints that could be vital and relevant currently in the process of understanding a family character or a critical event? Our questions remain ours, however, if we reinterpret scenarios, we will not simply transmit a historic state but already its remodelled version with the interpreted intention, with the additional cultural and social responsibility. Asking questions requires reflection and self-reflection, and for family members to have an insatiable commitment of constant re-examination of their history to pass down their perspectives to the next generation is vital. As if there were freezing reverence in a format of a photograph and then open it up for further re-interpretations. As Martin Heidegger pointed out; interpreting is when we are attached ontologically to the interpretable object, we are related to what we seek to understand, however, we are not reconstructing it but openly recreating the meaning. Our creative yet responsive disclosure of hermeneutic possibilities is what Heidegger calls “preservation,” because it works to keep the world opened by the work alive historically as a way of seeing and understanding. ^[2] The notion that our point-of-view is bound to a location and time is already easily challengeable, however, if family members were to merely contemplate and have a passive observer hat on, even if that were a critical one, they would not be able to elevate themselves to the horizon of the story/narrative/legacy creator as a post-creator or as a co-creator. They can only do so if they engage, place themselves imaginatively into the character of the founder/other family members and interpret ideas and events by fusing these horizons thus removing themselves from the notion of temporality. This way, they will be better conditioned to draw new connection lines, add their marks to these, and continue the storylines themselves. Each family member is compost of many strands of the family as well as their own kaleidoscope composed of colourful patterned shapes depending on the geo-cultural routes they took, languages they speak, education, beliefs, impressions, and experiences they had and how the different conditioning and interconnected relationships formed their character. They all bring their own unique originality of value proposition and competencies into the family’s legacy pool, and all these different fabriques and crafts make up the families’ existence. The success of interpretation happens when family members not only understand the various factors but also push themselves to contribute with a new meaning potential. A family legacy should be driven by a participatory design. Success is not in a quantitative wholeness, though. It’s in the engagement with each other’s thought processes, rather than biasing them. It’s in how the different contexts interplay with each other, and how we seek to merge our horizons and embark on co-creation journeys. As Gadamer highlighted, historical horizons are inevitable to the development of the horizon of the present. There is no more an isolated horizon of the present in itself than there are historical horizons which have to be acquired. Rather, understanding is always the fusion of these horizons supposedly existing by themselves.^[3] Family Legacies and the Fourth Dimension Families oftentimes assume that their family language and legacy exist and it’s theirs. Like a statue that they could walk around and inspect at any time. Hence, families tend to also assume that they are aware of the legacy patterns and understand their legacy. They were brought up with it, and they are creating their own universal semantic and syntactic “knowledge” that they use as a metalanguage and object language. If we think of the classical hermeneutic assumption suggesting that there was one right interpretation and the task was to find out how to reach it, here we can propose that it’s at least important to eliminate our assumptions and dig deeper in our interpretations, find the narratives, structure them, and align around them as a family. Understanding multifaceted family legacies and acknowledging the underlying stories, narratives behind them are all crucial for families to strike a chord with each other. Hans-Georg Gadamer’s route commences with understanding (subtilitas intelligendi), this prompts interpretation (subtilitas explicandi) which leads to applicability (subtilitas applicandi). What we understand and interpret, we can also apply. The stress is on interpretation. This step is easily forgotten, especially, when creating shortcuts and trying to reach effortless conclusions. Temporality serves another important element when dealing with interpretation evaluation times. When an interpretive process happens under a time constraint, both interpretability and explainability receive added pressure points, especially, if we are facing and have to navigate competitive narratives. Although our interpretations always remain partial and perspectival^[4], being well-versed in interpretation and re-interpretation processes may lead families to subtle conclusions that they can accept and agree on. Staying with temporality, time can also be considered as the fourth dimension for family businesses when comparing them with corporate firms due to their long-term view and complex family dynamics. Whereas corporates need to create their compelling stories and narratives, families have long-standing historic perspectives, their challenge lies in which stories to select out of the hundreds of thousands, and how to leverage them. However, many family-owned firms do not adequately articulate their core values into a workable orientation for the business.^[5] Capturing what these stories are and closely follow how their interpretation changes are vital. Naturally, the act of storytelling, the content of narratives and their interpretations change over time.^[6]  When families decide on the narrative that best captures their family legacy, fine-tune it, formalize it and let it permeate everything they do, the benefits are overwhelming: from increased productivity and loyalty to a more sustainable and harmonious business through the generations.^[7] Quantifying Narratives and Interpretations? It’s important to note, though, that it’s difficult to quantify narratives and their interpretations. Although there is a certain quantitative and qualitative potential to different meanings and interpretations, how a narrative makes impact and what is the extent of that impact, it’s incredibly hard to measure and establish its various directions and any reputational or other ripple effects. However, interpretation helps with both how to grasp what’s behind quantifications and also their qualitative explanation. With increased details we are more able to measure the constellation of narratives and re-interpret them. Narratives that dominate families’ thinking have the human, social, emotional, intellectual, cultural, and family capital elements that are difficult to assess quantitatively. Families like to illustrate their thinking by sharing stories and highlighting how their stories are evolving. Empirical understanding is key, attempting to understand and interpret, assessing potential consequences, action and non-action behind them, observing how the family members react to the narratives as they all form part of the story is a vital and rewarding process. The interpretive revision of traditions is accomplished through the application of the techniques of rhetorical history that focus on the subjective-interpretive processes by which traditions are passed from generation to generation.^[8] Narratives, legacies, and their interpretations are fragile, so are the emotional threads that hold families together. ———————- We cannot quantify narratives, but we can investigate how they impact our behavioural choices i.e., the mental model of the world through which we perceive the world and respond to it. In our lives, we are creating our subjective reality as a social construct. These realities are fuzzy with complex properties and they are in perpetual dialogue with the environment. For the creation and navigation of our realities, we use narratives. Our neurology is shaped by narratives and social processes along the consciousness continuum. In particular unconscious narratives control our cognitions and emotions, so it makes sense introduce some neuroscientific insights to think about how narratives work to shed light into the importance of narrative gestalts and the need to re-gestalt them. Enactive cognitive science understands cognitions as a temporal phenomenon as a response to perturbations of the (self-organized and self-regulated) human system and looks at the relation between cognitive processes and the world^[9], including narratives, that are a social phenomenon that evidently occurs in the world. Narratives emerged from the brains evolution to serve the purposes of increasing complexity, coordination, and connectivity between human beings. Narratives are both an effect of the brains’ complexity, and also a triggering factor of complex brain activity^[10] . They function as a bridge between painful emotional experiences and the inevitable efforts to explain them a give them meaning^[11]. Narratives (including self-narratives) impact the neural and bodily organisation, characterized by different patterns of synchronized neural and chemical activity. Self-concepts lead to emerging states derived from self-organising processes that shape the neurology of our bodies and brains respectively their multi-layered, co- evolution networks. This so-called mapping takes place within all our sensory perception, bodily structures and mental functions on a continuum of consciousness. The unconsciousness is pivotal and more important, than the consciousness. Science attempted to gauge the weight of the unconsciousness: seemingly volitional behaviours are not volitional at all but driven and executed bypassing conscious awareness in 95% to 99%^[12]. The unconsciousness is an instrumental system that actively relates to the world and learns through perceptions, priming and actions for future reference with the intend to be used for future adaption in the service of the maintenance of emotional and physical well-being, regardless of the truthfulness of the content. The emotional value of an experience is what ultimately determines how we react to it, internally and interpersonally. The conscious interpretation of an experience leads to different narrative segments. Parts of the narrative that are unacceptable to the conscious mind or intolerable affects that are inconsistent with our self-concept are rejected and ‘stored’ unmitigatedly in the realm of the unconsciousness. Nevertheless, the unconsciousness is instrumental in driving our behaviour, by predicting our futures and anticipation of reward and punishment in the light of current stimuli. Thus, it provokes defence reactions like avoidance, fear and anxiety reactions in response to stimuli that are automatically interpreted as threatening narrative. The unconsciousness also impacts the organisation of our memories: repression and dissociated self-states control how stimuli are interpreted, remembered and forgotten or stay hidden under the surface. Even un-reflected memories that are too robust can be maladaptive and prevent new responses to a changing environment. The narrative imprinted unconscious holds attractors that are reward based. The incentive to act towards the attractor is familiarity and innate desire for security. It happens out of awareness and through learned emotional and interpersonal habits reengaging in old and familiar intersubjective interactions. The enactment of the unconscious map is compulsive, triggered by an unconsciously perceived and interpreted stimulus. The reward is the feeling of emotional security and the associated emotional and physical well-being. This may well be a false sense of security – the ‘illusion of safety’ the derives from the ‘land of familiar’ as the outcomes of such a process may inhibit evolution as an impartial observer would assess. But without bringing this habit loop to conscious awareness, the pattern will repeat perpetually. On a similar note, when we deal with perceived, elevated stress levels, we tend to pursue default strategies. Acting in our narrative induced comfort zone, reduces cognitive dissonance, and we hold the unconscious belief perpetuated by self-narrative, that the ‘proven’ behaviours will work again. The outcome may prove that belief wrong, which -when unmitigated- exacerbates the problem. Again, we will attempt to find a narrative that reduces that cognitive dissonance. Thus, the network of external and internal narratives is driving our decision making and behaviour along the consciousness continuum. Perceptions in themselves cannot be differentiated from action tendencies of the brain has led to a perspective describing the unconscious as a function of our brain that is continuously involved in perceiving, interpreting, and acting on the world^[13]. So, the ever-active unconscious patterns are always humming in the background and as described above, can pursue goals with apparent motivation and determination, but without conscious will or plan^[14]. Unconscious neural patterns mediate conscious processes with motivational intentions that are not readily accessible for the conscious mind. Most of our perceptions, interpretation of stimuli, cognitions, actions and behaviours are outside conscious awareness but with intention and focus, can be mediated through conscious processes. Although, the unconsciousness is firmly in the driving seat, it has a bidirectional, reciprocal relationship with the conscious awareness and both systems are closely intertwined with a delay of ca. 500ms. This is evidenced behaviourally and neuroscientific ally: decisions are made unconsciously, and we only become aware of our decisions after the fact, only to engage in post rationalisations for the justification of the decisions we made. This neurological fact is also present in interpretations. They arise as a prejudice or pre-comprehension anchored in the historicity that refers to tradition in society^[15], i.e., the immediate respective wider social environment, that provides socio-cultural norms and frames that drive interpretations on the continuum of consciousness. The general question is, what does it take to make unconscious processes reach conscious awareness? We are surrounded by a plethora of stimuli that hit our five senses, in particular visual and auditory stimuli (language) alongside kinaesthetic, olfactory and gustatory stimuli. The brain receives electrical signals from ears and eyes that it needs to interpret to decide what stimuli are given attention to in a given context and what stimuli are to be ignored as irrelevant. From a bottom-up perspective, the strength respectively the frequency of a stimulus pivots the signal when it reaches a certain threshold to be further propagated into higher brain regions and thus, into conscious awareness. Top-down stimuli are driven by unconscious and conscious maps that generate intentions and are used for pattern perception and pattern completion, combined with motivational reasoning. Systemically, top-down bottom-up stimuli can spatiotemporally co-exist, which makes the interpretation and propagation of stimuli to conscious awareness even more complex. Narratives play a key role in stimuli propagation. Language is the connotative carrier of inchoate emotions and bodily sensations, so words inevitably shape and form the meanings and perception of our internal and external words on all levels of consciousness^[16]. Thus, narratives are essential in pattern formation, recognition and completion and are thus central for interpretation, depending on how narratives are interpreted historically. The interpretations, especially in the light of a high degree of self-relevance and emotional values alter the signal strength. Once the awareness threshold is reached, the neural signals are propagated to conscious awareness levels where conscious meaning is created in an iterative and recursive process, feeding back to the subconsciousness, changing the unconscious maps. The meaning that emerges through conscious processes is contextual and emerges from the horizons (mental model of the world creating motivational meaning) of the interpreter, a horizon that in turn is historical and represents interactions in the language that returns to the pre-understanding (hermeneutic cycle)^[17]. In essence, it refers to the recursive relationship of interpretation of a text or picture, which changes the mental model of the world which creates the requirement of reinterpretation. This feed-back loop can become reinforcing, highlighting some aspects of interpretation and meaning, while other aspects are not reinforced – pushed into the realm of the unconsciousness. As discussed above, consciousness is not a prerequisite for narratives to be effective. But, when we want the narratives to work for us in a useful way, it is inevitable that we gain conscious awareness of the narratives and their meanings they have for us as they are pivotal for our perceptions and actions. In a family context it is about becoming consciously aware of all individual- and group narratives, bring them into consciousness by creating system awareness and understanding in order to co-create a mutually shared narrative, a Gesamtkunstwerk with shared meaning. Neural patterns in individuals self-organise and emerge in conjunction with the social environment through neural coupling. Social systems emerge from self-organizing, neural coupling following social attractors. The Gesamtkunstwerk of a family can represent a social attractor, towards neural and subsequently behavioural patterns of activity gravitate to. The social system will handle endogenous and exogenous perturbations better with a strong attractor, i.e., an attractor that is system relevant across all dimensions of time. Only then can the attractor foster the systems’ adaption capacity and keep it synchronised, which is central for system resilience. But without the important work of dynamic narrative creation and interpretation processes away from a purely epistemological approach, which is driven by cultural norms to more phenomenological appreciation, this will be ineffective. Phenomenology allows for more freedom degrees, it essential for diversity respectively variability, which is critical for evolution, adaption capacity and system resilience. Let’s look at a visual narrative – the picture my family has painted in a self-organising process. The picture wants to tell me a narrative in a language that I may or may not understand. First, I analyse the syntax of the picture as objects that are laterally, vertically and diagonally interconnected. A semantic analysis requires a narrative that I can understand and relate to. This creates system awareness, provides me with spatiotemporal orientation and gives meaning to the objects and interconnections such that I can grasp the patterns of relationships by suspending subjective temporality and by projective identification with protagonists. In this process, I learn the language of the Gesamtkunstwerk and when we do learn together as a group (social system), we create a shared, conscious meaning of the Gesamtkunstwerk. It becomes a representation of a shared symbol which unfolds gravitational forces through shared meaning – it becomes a social attractor for a social system, a strong emotional and subconscious power that holds people to a dominant belief system they share. It subtly irrigates and controls conscious thought. The attractor has changed our perspective by modifying and updating our mental model of the world, i.e., the way we perceive the world and how we respond to it. But social attractors exhibit metastability in their relevance, so we need to revisit the Gesamtkunstwerk from time to time, simply because other stimuli in daily life manipulate our maps and mental model of the world. Thus, when we look at the Gesamtkunstwerk after a year, we will perceive it with our updated maps and mental model of the world, so we need to realign language and meaning through re-interpretation, which in turn, will alter our mental model of the world. Stability requires variability. If we want the Gesamtkunstwerk to be a strong, stable attractor, we need to introduce this variability and engage in a recursive process of interpretations and re-interpretations. The absence of variation creates rigidity and hence, instability. If we fail to reinterpret the Gesamtkunstwerk it becomes a rigid attractor unfolding fundamentalistic effects, as the above termed ‘familyisms’. We tend to interpret actions and consequences of our actions through the same mental model that enacted them, i.e., without reflection the actors will tend to project the historical moments’ perception onto the emerging situation and risk to misinterpret it. But without shared appreciation of change, the response to any perturbation and their consequences will lead to fragmentation and reduce adaption capacity. The absence of learning and organismic evolution and the emerging rigidity in the worldview precludes the possibility of understanding and reflection as well as any corrective judgement or long-term perspective^[18]. This corresponds to the innovation paradox in family businesses: typically, they feature a superior ability to innovate in combination with the inability to change, which is inevitable for innovation of any sort. After all, the most expensive words in business history are ‘we have always done it this way!’, which is an example of group habits – characterized by a rigid attractor that is no longer useful but are almost compulsory and unwittingly followed, regardless of the changing environment. A real roadblock to innovation and evolution! We need to accept that change, and consequently the need for repatterning is the norm rather than the exception, so all interpretations are transient. Thus, re-perception and reinterpretation are essential to navigate change and for combinatorial evolution. Hence, the Gesamtkunstwerk must be a dynamic representation of a symbol to make a strong attractor – only then it empowers the family and creates adaption capacity, to move forward in a synchronised manner regardless of perturbations. Therefore, introducing variability in the form of frequent interpretation and reinterpretation of narratives on all levels of consciousness with the ability to change them keeps things stable. ^[1] Alfredo De Massis (a,b,c) and Emanuela Rondi (a) Covid-19 and the Future of Family Business Research. A Free University of Bozen-Bolzano; b Lancaster University; c Zhejiang University Journal of Management Studies 57:8 (December 2020) ^[2] Iain Thomson, “Heidegger’s Aesthetics”, The Stanford Encyclopaedia of Philosophy (Fall 2019 Edition) ^[3] Hans-Georg Gadamer, Truth and Method, pp 340 (2004) ^[4] Hans Robert Jauss, Towards an Aesthetic of Reception, pp 92, Theory and History of Literature; vol 2.  (2005) Also, pp 49: The interpretative reception of a text always presupposes the context of the experience of aesthetic perception: the question of the subjectivity of the interpretation and of the taste of different readers or levels of readers can be asked meaningfully only when one has first clarified which trans subjective horizon of understanding conditions the influence of the text. ^[5] Dumas, C., Blodgett, M. Articulating Values to Inform Decision Making: Lessons from Family Firms Around the World. International Journal of Value-Based Management 12, pp 209–221 (1999). ^[6] Francesco Barbera, Isabell Stamm, and Rocki-Lee DeWitt The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship. Family Business Review pp 1–27 (2018) ^[7] Aquesha Daniels, Esq. Beyond Succession: Family Firms Need a Legacy Plan Too (Western Kentucky University 2020) ^[8] Roy Suddaby1,2 and Peter Jaskiewicz3 Managing Traditions: A Critical Capability for Family Business Success, Family Business Review 2020, Vol. 33(3) 234–243 (2020) ^[9] Enaction and Neurophenomenology in Language, Roberto Aritegui in Neuroscience and Social Scienc, Springer ^[10] Psychotherapy and Social Neuroscience: Forging Links Together, Andres Roussos et. al, in Neuroscience and Social Science, Springer ^[11] The Neuropsychology of the Unconscious, Efrat Ginot, Norton ^[12] McGilchrist in ‘Therapy in the Age of Neuroscience’ by Peter Afford, Routledge ^[13] The Neuropsychology of the Unconscious, Efrat Ginot, Norton ^[14] The Neuropsychology of the Unconscious, Efrat Ginot, Norton ^[15] Enaction and Neurophenomenology in Language, Roberto Aritegui in Neuroscience and Social Science Springer ^[16] The Neuropsychology of the Unconscious, Efrat Ginot, Norton ^[17] Enaction and Neurophenomenology in Language, Roberto Aritegui in Neuroscience and Social Science Springer ^[18] Systems Thinking for a Turbulent World, Anthony Hodgson, Routledge

We are a peer-group network of multigenerational business family-members who have hands on experience with family dynamics. Our mission is the empowerment of families to maximize the advantages of the family effect on the creation and preservation of socio-emotional and financial wealth for current and future generations.

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NARRATIVE EMBEDDED – FAMILY GOVERNANCE

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Table of Contents[i]

Abstract 2

Social System Dynamics. 2

Narrative Effects. 5

Framing Effect of Narratives. 7

Social effect of narratives. 8

Neurological Representation of Narratives. 10

What we do with memories. 12

‘Learning’ the narrative. 13

Epigenetics and Inheritance. 14

The Transient Nature of Narratives – an Epidemiological View.. 17

Hermeneutics – The art of making and understanding meaning. 18

Narrative Governance. 23

Narrative fragment inventory [NFI] 23

Co-creation of the family narrative. 24

Family Narrative or Family Constitution?. 26

Conclusion. 28

Summary. 28

Acknowledgements. 29

 

Abstract

This paper discusses the importance of Narrative Governance. We explore the effects of narratives on human behaviour in a business family context, the transformative nature of narratives and how they can have sustainable effects on individuals and social systems. We will argue that narratives are acquired and neurally programmed by social processes as well as biologically through genetic information, with has implications for subsequent generations: Offspring inherit not only wealth but also stories from their parents and their forefathers. Targeted Narrative Management ensures advantageous effects of narratives while reducing aspects that are disadvantageous. It creates a shared identity and supports psychological ownership

Language that is sensory rich evokes mental images which are predominantly processed in the right brain hemisphere respectively in the default mode network [DMN]. Information presented in the form of narratives ensures better process fluency, i.e. they make information more human, more relatable and hence, easy to process with low energy investment. This is key, because the human brain is wired to conserve energy and prioritizes processes, that are minimal in energy consumption.

In contrast, family constitutions are more energy intensive to process, carried out mostly in the left-brain hemisphere respectively in the cognitive control network [CCN], which is linked to processing language and logical operations. To make family governance most effective in synchronizing the social system by fostering a sense of ‘collective psychological ownership’ [CPO][1] and to create system resilience respectively a social environment for generative collaboration, we need to work with the whole of our neurology.

Social System Dynamics

Let’s look at a business environment: work occurs through collaboration in networks of relationships that often do not mirror formal reporting structures or standard work processes – thus, the social system is self-organising which is rooted in human nature. To exist means to interact[2], entities (microscopic perspective) are constituted by personal interaction with others which constitutes a system (macroscopic view). The interaction occurs through social processes, characterized by recursive patterns of relationships and is institutionalized in social systems.

Human cognitions materialize in an interpersonal space, so we need to view everything in a multi-brain frame reference. Interactions with others fundamentally shape the mental model of the world, i.e., the way individuals think (feel) and act in the world. This dyadic dynamic of social processes leads to joint behaviours that would not emerge in isolation of individuals (entities). The emergence of complex behaviours requires coordination and rules[3], culture and customs and is partly self-organised. Social norms and hierarchical governance structures influence social systems in their organization in a formal way. The desired goal is isomorphism, i.e. that structure determines behaviour, which is often nothing more than a projection of linear assumptions into a non-linear world leading to many unintended consequences that are outside of control and command because of emergent systemic properties. This lends itself to viewing social systems as unpredictable organism rather than a predictable mechanism, where we can rely on clear relationships of ‘cause and effect’ chains and thus, can calculate the outcome of change in time.

Latent patterns of relationships in a social organism self-organize informally and create emergent behaviours, i.e., behaviours of the system that couldn’t have been predicted from knowledge of the interacting components that are structurally coupled and they are not reproduceable elsewhere. Spontaneous synchronization and desynchronization are dynamical changes in the patterns of relationships.

Naturally, social systems are open, evolutionary, and dissipative systems – they are open to flux, flow, and exchange of energy with other systems and the environment and change over time. Evolution means dynamic system changes that are occurring between two equilibria, typically in some form of creation, mutation, or destruction. State changes are perturbations that cause the system to adapt or tip the system into significant turbulences when the system cannot adapt. Perturbations come either from within or the outside of the system and initiate phase transitions that either maintain the stability of the system through self-regulation that accommodates the variability, or, when the system is rigid and unable to adapt because the perturbation exceeds the adaptive capacity of the social system, so the social organism begins to bifurcate[4] or collapses into chaos altogether to emerge into a new structure which again, cannot be explained by the sum of its parts.

A system is chaotic, when long-term predictions of system dynamics are impossible because the uncertainty growth exponentially fast and the autocorrelation function of the time signal converges to zero in finite time. In this case, any forecast is art rather than science based on statistics.

These unstable trajectories hinge on initial conditions and errors of assessments that can accumulate exponentially into substantial errors (error explosion) e.g., initially close trajectories diverge exponentially fast (bifurcation).

Perturbations can be demonstrated on a sand pile model: the initial condition is described by a pile of sand in a static rest state that changes by a randomly chosen entity. This perturbation triggers a cascade of secondary events until the system finds a new rest state.

Perturbations in family systems are happening regularly and they represent transformational events that initiate transition phases of the system.

Typical perturbations to business family systems are e.g., behavioural gaffes of family members that in the worst case can harm the reputation of the family, the birth of the second generation, marriage, divorce, death, succession or economic crisis. They are all regular transitional events that initiate transition phases. If we live through change, we prefer it gradually. However, in our reality they often come in fits and starts which often makes dealing with change more difficult.

Dynamical, social systems self-organize around attractors – it exerts appeal to the system elements to which they dynamically converge. It is a gravitational pull that shape and stabilize system behaviours around a limited number of possible states. Attractors are invariant but social attractors exhibit metastability. This means, social system equilibria are not forever, so they can have many on a spatiotemporal scale, initiated by perturbations.

The properties of social attractors are basically concepts, that people constantly try to validate. Concepts are reusable representations of objects that share common properties. Instances of concepts are also complete thoughts like purpose, identity, values & beliefs, desires, intentions, or memes used for goal-directed decisions which entails the encoding of the action-outcome contingency. They are symbols that evoke strong emotional and subconscious power that holds people to a dominant belief-system that social system entities share.

Evidence can be taken from great company leaders who shift their organization out of the quandary of extrinsic motivation, self-interested optimizing parts enforced by control and command and when things are not working, double down – and do more of the same, to a purpose driven organization, where people are intrinsically motivated because they are connect to a higher organizational purpose (the attractor) and thus, perform better and are more productive[5]. This has implications for how well a system adapts when perturbed.

How well does the system adapt or bifurcates, tips into chaos, and reorganizes is linked to the adaption capacity, which is a function of the quality and dynamicity of attractors, the diversity and freedom degrees. Sometimes organizations become victims of their own success in massively changing conditions because they fail to break-out of behavioural patterns that made them successful in the past.

This describes a rigid system has no degrees of freedom (no diversity) which leads to destruction and fracturing, a resilient system has more degrees of freedom (i.e. diversity) and is faster and more effective in adapting from one state to another[6] In other words, this system has a higher adaption capacity through resilience. But what makes a social system resilient?

There is strong evidence, that narratives represent attractors and create teleological social systems which combine functional change with increased meaning as they connect, work like memes that represent strong social attractors that can keep social systems synchronized, increasing their adaptive capacity, foster Collective Psychological Ownership of the wealth and hence, make family systems more resilient, which is essential during adaptation in phase transitions.

Narratives unfold their power as structures that give coherence and meaning to every day’s life is at the core of the so-called symbolic interactionism theory. As a long-standing approach in social and family science, it analyses human behaviours by adding subjective meanings that people impose on symbols like objects, events, and phenomena[7]. The central assumption of symbolic interactionism theory maintains that people act towards symbols (attractor), in accordance with their interpretation of meanings these symbols have for them. These meanings are malleable and are generated in an ongoing social meaning making process such as storytelling (narratives) and are modified by interpretations (Hermeneutics).

Narrative Effects

Language is a shared code of communication, habitual configurations which we use to make meaning of sensory inputs. It is the symbolic carrier of emotions.

Narratives are coherent, language-based constructs that provide a link through words that are fully embedded in a wide range of affects, processed in the right hemisphere (Broca’s and Wernicke’s area), where most of our affects and emotions are processed. Language codes are symbolic signals that are processed emotionally and cognitively into coherent, emotionally stimulating narratives.

The neuropsychological reality we construct across all modalities can be defined as a function of the imaginable which can be transported on any spatiotemporal scale by the way of language and narratives. Stories have the power to pattern and repattern our brains as they shape and reshape fundamental processes of embodied cognition, especially when it supplies motivation and causality, and the sequence of events is made meaningful and understandable[8]. Narratives configurate, re-figurate and trans-figurate experiences involving brain-based processes of retrospective and prospective pattern formation that are fundamental to the neurobiology of mental functioning. In this recursive process, meaning emerges from experiential interaction between sender and receiver and create a coherent whole. Generally, we live forward and understand backward in our everyday experience of our world. Narratives are the principal way how we organize our understanding of time, which we do not experience linear but as a product of a to-and-fro process of pattern-formation and dissolution.

As we go through life, we are actively constructing narratives with cause and effect, which attract each other mutually in subjective time. However, cause and effect are only inferred from the sensory experience of temporal contiguity[9] to complete the information set presented. Life is an activity and a desire in search of a narrative to close information gaps that we face in a world with incomplete information because information is not presented, not perceived timely, or deleted or distorted.

The information given in form of a narrative is partly processed outside our conscious control which can be used for effective manipulation of behaviours.

Studies in social cognition suggest, that our brain and our beliefs are largely shaped by cultural factors[10]. Our social identity is determined by our membership of various groups with shared memes (religious, national, political, socio-economic) and shared traditions (skills, beliefs, rituals). This shared intentionality binds groups of individuals. The connecting element are narratives, that shape social behaviour.

Narratives are oldest form of cultural transmission[11] and we are predisposed to process and remember them.

Narratives are essential for our individual and social meaning making process of experiences and how they are represented neuronally. They provide context, i.e. a meaning-making structure and shape selective attention and perception processes (motivational perception) and decision-making processes, so that reality is constructed according narrative principals. Narratives shape the experience of relationships and the world beyond[12]. Stories work ideologically and have the ability to inculcate, perpetuate, and naturalize embodied habits of cognition and emotions[13]. They constitute a valuable source of collective knowledge, mutual meaning, social cohesion, and function as an extended mind through their capacity to distribute intelligence, to disseminate knowledge about or ways of engaging with the world creating a society of mind through the ‘supra-personal’ system for sense and meaning making[14]. Cultural transmission and evolution are driven by memes, not people[15] and narrative play a key role in it as they can function like memes.

Specifically, narratives evoke emotions which can be described as embodied cognitive processes that guide our attitudes and attunements, focus attention, and coordinate our relations to others and facilitate collaborative interactions. Emotions are biocultural hybrids acquired and constructed over a lifetime under cultural influences. Emotions are instrumental for the iterative progression of narratives, often without deliberate awareness and play a vital role in anticipation and evaluation in social processes as temporal structures. How a narrative evokes and manipulates emotional responses is integral to how it builds, breaks, and reforms patterns of thoughts and memories. Emotion’s gestalt and re-gestalt our world in global ways, they facilitate our understanding and are instrumental in encoding and retrieving stories. Finally, motivations of any sort are in emotions that initiate goal directed behaviour.

Framing Effect of Narratives

Narratives are non-abstract and contextualized frames that help to conserve and mediate individual experience and can be used as background knowledge when experiencing novel situations[16].

Concretely, narratives can act as frames and memes, i.e. narratives become anchors in the sense, that they unconsciously trigger emotive and cognitive processes just by the sheer mentioning of fragments of the narrative. The framing effect epitomizes the power of linguistic subtlety in regulating decision-making, experiences, evaluation, preferences, and persuasiveness of messages[17]. The framing effect has been evidenced in many behavioural economic studies. Based on the invariance principal, the preferential choice between two options should be independent of their description. But we are predisposed to persistent decisional biases driven by frames. Experiments revealed that choices between logically two identical set of options depend on how the options are framed .[18]. This is confirmed by meta-studies: the framing condition was the top choice predictor, just followed by the expected economic pay-off[19].

Research in neuro-marketing substantiates these findings further: the subjective consumption experience is guided by external cues. The beliefs of consumers about aspects of a product like quality, price, brand, or packaging can influence the perception of the product itself (marketing placebo effect)[20]. Experiments with placebo pain killers showed, that probands stated preferences for the higher priced product, because it was perceived as more effective in killing pain, and neuroimaging studies with wine revealed preferences for the higher priced wine, as it elicited greater innervation of the reward circuitry in brains compared to the lower price indication. The price is a cue, the anchor, a fragment of a narrative which triggers a script in the mind of the consumer. But these decisions are made outside conscious awareness. Our asynchronous brain processing will synchronize the information only after a few 100ms when we become aware of our decision. We post rationalize and justify the choice we made: ‘Ah, yes, this wine must have been better because it’s more expensive. I know this from my experience’. We tell ourselves a confirming, reinforcing narrative using epistemological arguments to confirm the correctness of the decision we made to feel better about ourselves.

In other words, choices are not made based on objective information, choices are rather driven by external and internal narratives which transform frames and drive subjective experiences!

Social effect of narratives

Social cognitions are significantly influenced by narratives, especially when presented information is incomplete. Information gaps arise when primary contextual or social cues are absent or incongruent which poses a conflict situation. Narratives help to fill in the information-gaps, linguistically and affectively. This reduces perceived ambiguities in social decision-making processes[21]. For instance, when we consider with whom we want to cooperate, we may only have incomplete information about the contextual situation and the agent. So, we rely on a mix of the agents’ reputation (i.e., narratives told by others about the cooperative behaviour of the agent) and self-created narratives.

This mutual coordination and participatory sense making requires interactive, iterative socio-cognitive processing of two or more subjects to synchronize iteratively in a temporal rhythm of collaborative sensemaking which is happening naturally and can be guided with narratives that promote shared intentionality, which attracts the system towards (mutually) intended behavioural patterns. Finally, a greater social system awareness uncovers how people contribute to the systems outcome. Understanding the and experiencing the system through narratives allows individuals to realize the structure and meaning of interconnected patterns of relationships. Developing a shared picture of reality enables stakeholders to experience their responsibility for the whole system instead of just their role they assumed or that was given to them. Thus, a shared meaning-making process increases the performance of a group from the natural or habitual way people try to work together[22] and it produces a state of alignment where people freely commit in the wake of systemic consciousness.

Individuals engaged in a social process (informal and formal) can be described as coupled dynamical systems.

In physics, two or more swinging pendulums miraculously seem to coordinate their movements, but this emergence of generalized synchronization is a common phenomenon that often occurs whenever two oscillatory systems coupled to each other through action[23]. The interactive brain hypothesis relates to this phenomenon in the individual brain (neurons that fire together, wire together), but experiences of rhythmical, temporal coordination between people suggest, that this kind of coupling also takes place when two brains interact. The oscillatory dynamics associated with binding, attention, and dynamic coordination through which neuronal assemblies are formed, dissolved and reformed are similar to the to-and-fro movements of a swinging pendulum. In a simple speaker-listener model, neural coupling occurs, i.e. a shared neural substrate that exhibits temporally synchronized response patterns across communicators[24].

Herd behaviour is a social coordination phenomenon, where each person relies on the decision of others to guide his or her own actions. When well entertained masses applaud, they start out in loud chaos where everyone claps in their own rhythm. In the first transition phase, the masses spontaneously synchronize their clapping for a while before it transitions back into chaos before it fizzles out. Singing and dancing is another act of interpersonal coordination.

Neuroscientific evidence is delivered by empirical findings about neural correlates of interpersonal coordination. The Common Coding Theory basis this phenomenon on our capacity to attribute mental states to others (Theory of Mind which is essential for us to understand and enjoy stories), supported by the mirror neuron system [MNS] in our brains. The MNS may underly much of our social learning (including language and social meaning), it is involved in mutual action, understanding the intension of others, imitation and empathy[25] i.e., the interface into emotional worlds of other people which narratives can instrumentalize effectively.

Research shows, the MNS is involved in mentalizing and simulating the states of others, it is active when subjects engage in instrumental actions and one participant sees another person engage in specific activities (or in personal interactions). Simulation theory is at the heart of self-awareness and social cognition, by assuming that we understand other people’s actions, emotions, and sensations by mapping the onto our own sensory and motor mechanisms[26] and integrate them into our mental model of the world.

The activation of mirror-neuron-assembly is related to grasping the intention of the acting individual[27]. According to the neuropsychologist Efrat Ginot[28], the MNS seems to affect many experiential aspects of self-organization such as emotional (projective) identification, creating in our brains the affects and intentions of those we observe or interact with by the way of embodied simulation. We understand other peoples’ behaviour by recreating and mapping mental processes on ourselves, that would reproduce their behaviour and share their world. On a conscious level, it is a narrative like simulation, or on an unconscious level, corresponding neural circuits are innervated[29].

The MNS creates shared mental states (that inevitably affect bodily functions) and enables social cognitions, responsible for the development of social meaning, symbolic language and social contagion.

The oscillatory brain coupling through narratives has been neuro scientifically researched in hyper-scan experiments, where two or more people collaborate while researchers monitor their brains. On the condition of successful processing of incoming information and thus, effective and shared communication, it has been shown that people who shared a story, showed higher interbrain synchrony than those who did not[30].

Narrative induced neural coherence, i.e. the spatiotemporal brain-to-brain synchronization of brain activities of individuals was studied while probands were producing respectively listening to a story. fMRI imaging showed temporal correlated synchronization across brain networks in regions that are associated with understanding, identifying, and internalizing the experiences of others – respectively coordinating attention and memory[31].

Brain activities of a storyteller and listener synchronise not only in the language processing areas but also in a collection of extralinguistic areas crucial for successful communication that are associated with the mirror neuron system and known to be involved in the processing of semantic and social aspects of the story and are associated with the capacity to discern the beliefs, desires, and goals of others[32]. One of the extralinguistic areas that are activated during coupling is the insula, a region of our brain which functions as mind-body interface indicates, that the synchronization does not only affect cognitions but also the body. Thus, interbrain synchronization refers to embodied cognitions, a process that comprises brain, body and the interpretation of context and the social environment.

Narratives can be seen as a Common Coding Process, as they synchronize and harmonize brain activities of individuals as they create shared intensions that guide dynamic system outcomes. The stronger the coupling between the story-telling brain and the receiving brain, the better the comprehension of the received information and the better the comprehension[33], the stronger the interbrain synchrony.

We have seen, narratives are social constructs that synchronise brain-to-brain activities of two or more people. They are shared mental constructs, linguistically forming images symbols and memes that people can hold on to. Narratives represent attractors in social systems as elements of the social system gravitate towards to the attractor and self-organize around it. Narratives can shift and change mental models and can be deliberately used as the glue of social systems e.g. business families and business enterprises. This ‘social glue’ is especially useful when business families go through transformational changes (phase transitions), triggered by large perturbations that potentially lead to tipping points – the harbinger of chaos.

Neurological Representation of Narratives

The development of communication is fundamentally embedded in social interactions across individual brains. The emergence of any communication system requires a shared understanding of the signals meaning within a particular context among entities of a social system (Wittgenstein). Such common ground is established through learning[34].

Narratives shape our brains because they are a form of learning, the brains default position in the service adaption and survival. Learning is an associative process that makes changes to the brain on multiple levels which includes inputs about emotional memories that reach the cortex from subcortical emotion centers, such as the amygdala and bias memory construction, reconstruction, and reconsolidation after retrieval. The amygdala influences our attention, perception, and memory formation. This neurological structure projects to the frontal / temporal lobes and to the hippocampus, a formation in the brain that organizes, transforms, and consolidates memories. The thalamus is instrumental in directing our attention and projected on by the amygdala.

Emotions are in constant communication with the hippocampus which is central to memory management, guided by their emotional values, meaning and context. Emotional memories, i.e., with strong emotional markers, are more saliently present and processed than other types of memories[35].

Strong emotions related to amygdala projections are asymmetric[36]. They are quick and effective in their influence, mostly formed and enacted outside conscious awareness. Once an initial, emotional reaction is programmed, it is hard to unwire! Thus, emotion invoking narratives can unfold great leverage over this process on all levels of consciousness, creating implicit and latent patterns of behaviour.

Learning literally wires and rewires synapses and destroys and creates connections and neurons until we die (i.e., Neuroplasticity, Neurogenesis). The learning creates new connections as neurons fire and wire together, when we unlearn something, the brain de-wires as neurons no longer fire together. The brain is like a muscle that growths stronger with exercise and weakens in absence of the stimulus, i.e., uses it or lose it!

We learn through all our five senses and process information by other-than-conscious processes, and to a lesser degree by conscious processes. The information intake is directed by attention (e.g., by narratives), which is either bottom-up, i.e., external cues grab attention as they hit the sensory cortices of the brain or, bottom-down, by internal processes like conscious motivations, that focus attention. Our cognition is not linear. It is a reciprocal, to-and-fro process of assembling brain-network regions responsible for conscious respectively unconscious processes – into patterns that can temporally stabilize through connection followed by repetition and destabilize to mold our understanding.

The multi-sensory information input is held in short-term memory, a buffer zone which can be described as residual, neural activity after the stimulus. Further neurological processing will either delete the information or pass it on for further processing and storage of the information, depending on attention and focus directed by emotion. A salient factor for storage and retrieval of information are emotions (emotional markers) as described above, especially when the information is self-relevant. Sensory information with high emotional content will be granted priority in processing, storage, and retrieval. Consciously perceived information passes through our working memory, a neurological space where one or more information bits are edited e.g. for comparison. After processing, the new, synthesized information is stored in different locations in the brain. Mind you, the brain is not a filing cabinet!

It is a combination of electrical and biochemical activities spread across different regions in the brain. When the information is needed again, the information is retrieved from various locations in the brain and is reconstructed, which inevitably is error prone. Emotional content associated with the information makes events more memorable as they enhance the encoding process, i.e., consolidation of memories related to the event or narrative, but do not affect the accuracy with which the memory can be retrieved. The retrieval of memories is facilitated by synesthesia during the storing process, i.e., associating multiple sensory information to the event (multi-sensory coding of memories). A great number of neurons are dedicated to process visual information, which projects directly to the hippocampus. Spatial information is also processed in this region and used for encoding memories. The formation and reconsolidation of memories can be influenced e.g., by the way narratives are written. Rich, sensory, multi-modal language that evoke emotions and images make narratives associable and memorable because of the way our brain works.

In total, there are 7 different types of memories identified in our brains. Most important for narratives are short-term memory, the working memory, and long-term memories such as the episodic memory, which is structured and responsible for memorizing chronical details of events which is the autobiographical part that looks after self-relevant events and the semantic memory, which is unstructured and stores concepts and facts.

Narratives can be interpreted as concepts, so we can assume, that this semantic information are predominantly stored in the semantic memory section.

Narratives coordinate the different processes of our memory and thereby cultivate our ability to engage processes of binding and integration across different time scales and types of memories.

The interaction between short-term working memory and long-term memory across ever-shifting boundaries of working memory, ranging from subliminal priming effects to explicit, conscious acts of episodic and semantic recollection. Entertaining narratives are stored in our semantic memory section which presumably has more storage capacity and is easier to access. A simple chronology of events is stored in the episodic memory section of our brains which is usually limited in capacity and accessibility.

The default mode network [DMN], which includes parts of the amygdala and the hippocampus, is instrumental in memory formation and retrieval as it constantly rehearses emotional experiences and reflections about the self and others. All processes occur on a continuum of awareness and if reinforced, become part of an unconscious map which shapes attention, perception, and actions in conjunction with conscious awareness.

What we do with memories

Our memory is a neuronal representation of our experiences summarized in concepts and schemes that we use to navigate our environment. It is essential for our top-down attention, perception, and interpretation of events as well as responses. It serves us with information to predict and make sense of the stimuli we are exposed to within context. When we receive respectively perceive a stimulus, either internally or externally, we seek to recognize patterns, complete patterns by making inferences and match it with patterns that we have stored and that are readily available, either consciously or unconsciously. Matching the detected pattern to a stored pattern in response is error prone as we engage in curve fitting activities and ‘fill gaps in patterns’ (pattern completion), just to ‘make it work’ in the heat of the moment, often using narratives to help us out with pattern recognition.

Everyone has unique schemas and concepts that form a subjective mental model of the world. It defines our subjective reality and thus, how we experience the world, respectively how we respond to it. This leads to a wide variety of recursive perceptions and behaviours in social processes, some are conscious, many are unconscious. The latter amount to even changing energy levels of the individual which impacts on the social system. It is evident that we only become aware of our decisions after approximately 500ms[37], so there are pre-cognitive and pre-sensory processes which also amount to the hunches and actions we fail to explain scientifically, however we use readily available narratives (availability bias) or create narratives to reduce the elicited cognitive dissonance. These per-cognitive and pre-sensory phenomena are attributed to ‘Psi’ or the 6^th sense. PSI is influenced by the narratives and influences our energy levels and thus, impacts on the social environment and vice versa.

At a cognitive level, narratives inform the present and help to imagine the future, i.e., to imagine perspectives and events beyond those that emerge due to neural processing from the immediate environment. Our ability to reconstruct memories from the past is closely linked to our capacity to imagine the future, including errors and illusions which allow the imaginative simulation of future events. It requires a system that can draw on the past in a manner that flexibly extracts and recombines elements of previous experiences and knowledge which is based on individual schemas. Paradoxically, the ability to forget is also essential. Sticky memories can be disadvantageous to adapt behaviour and patterns of thoughts and feelings to a new and changing environment driven by e.g., a narrative.

Forgetting one initial condition and replace it with a more useful version – e.g., delivered by a new narrative – is essential for humans to adapt according to an ever-changing environment. In this way, narratives can change our mental model of the world.

‘Learning’ the narrative

Our memory is a network of associations that forms through encoding memories. The quality of the neural representation of the narrative is a function of the encoding process as discussed above, sleeping patterns and the number retrieval process. Research found that efficient learning is linked to 3 retrieval cycles (retrieve and re-code) rather repetitions (re-code), and it needs 40-50 iterations for a behaviour to enter the procedural memory in becomes a habit[38].

The transformation from short term and working memory into long-term memory sections happens especially while we sleep, even if only for a short period of time. Learning is more effective when we stimulate the brain and multiple levels and leave it to rest to integrate information between retrievals. Narratives we embrace and repeatedly presented with respectively retrieve over a couple of days can literally program our mental model of the world.

Dreaming is a form of retrieving narratives we create, and it runs in the default mode network, i.e., the brain regions active when we are not focusing on any task. REM sleep can lead to new associations among preexisting memories as the brain is engaged more with processing associative memories than simple consolidation of recent memories. Emotions may play a crucial role in REM sleep. Greater amygdala activity during REM sleep adds to the deactivation of the cognitive control center. Thus, dreams allow us to peek into unconscious processes as interpreted, recalled, and retold by our conscious self[39] and thus, are very important for our learning process.

Finally, this learning process is a recursive action. It changes the brain structure and influences our attention focus, perceptions, actions, and behaviours. In turn, the neurological change alters the way we process narratives and other information we perceive.

It is very interesting, that we are not born with a blank sheet of paper that can be programmed from scratch. Narratives are partly pre-programmed by the way of biological inheritance.

Epigenetics and Inheritance

Behavioural genetics investigates the biological basis of human decision. Genes contain the information for cell differentiation hence they are responsible for the production of brain cells, hormones, and neurotransmitters. Thus, genes are affecting decision-processes[40]. There isn’t a genetic blueprint for how exactly each individual brain will turn out. We know, it is high in structural and functional plasticity and evolves as we grow up, building on previous developments (neuro-constructivism).

There is general agreement, that genes and environment interact[41], presumably for evolutionary adaptation. Epigenetic states are the candidate mechanisms that link environmental conditions with changes in gene expression and neural development. Environmental conditions can directly alter epigenetic states through the activation of intracellular pathways [42] , impacting cell-differentiation.

The structure of the genetic code for each person is fixed at conception, but the functioning of the genes (gene expression) is highly dynamic. Genes get tagged with a chemical marker that suppresses or accentuates gene expressions[43].

This is like the variations of classic stories. Romeo & Juliette is a fundamental story (the gene). All theatre and film directors and film producers have the same information set (the genes), yet they use the same information in different ways, i.e., they interpret the same story differently, expressed and reflected in the actual performance of the play (the gene expression). The reinterpretation or- change in gene expression – in the human case is performed by individual psychoneurological structures in conjunction with external, contextual stimuli (such as narratives) and change behaviours. Contextual stimuli are processed via the mirror-neuron network, which is responsible for imitating mental or emotional states of others and works on an awareness continuum. In particular during pre- adolescence and adolescence, when the cognitive control network is still not fully built, it is programmed outside of conscious awareness. Thus, traumas and narratives of parents can be handed down generations also based on their behavioural expressions and unconscious, unmediated consumption of related behavioual patterns by the child respectively the adolescent.

The propensity to exhibit certain behaviours depend on a particular combination of gene and environment across the lifespan. Epigenetic changes in gene expressions can be linked to drug abuse and toxic environments – in both spheres -socio-psychologically and physiologically with implications for addictions, anxiety disorders and fear conditioning, which reduces mental capacity.

Research found that perinatal environmental conditions influence the capacity for neural plasticity later in life through epigenetic regulation of genes critical for synaptic re-modelling, affecting social behaviours and the capacity to learn and memorize. It seems, the fetus prepares for the post-natal environment in response to a complex information set defined by the environment it is most likely to encounter, starting with mother’s phenotype[44].

Other research shows that the effects of epigenetic changes exceed what would be expected from the sum of its parts. For instance, childhood abuse transcribes a gene that is linked to eliciting anti-social behaviour. The adverse experience has changed the gene expression in a way, that anti-social behaviour of that person is more likely. Another study found variation in a gene, that is responsible for transporting serotonin, called the happy chemical, because it contributes to wellbeing and happiness. The change in gene expression was linked to a greater susceptibility to depression and suicide after adverse experiences such as divorce[45].

Another example is one gene[46], whose protein is involved with neurons making connections in the brain, notably in the amygdalae. This brain structure is associated with emotional processing (especially emotions like fear) and it plays a salient role in the learning, memory consolidation and decision-making. Defects in the amygdalae are associated with heightened sensitivity to fear, (social) anxiety, aggression and addiction The Amygdala tends to be bigger in individuals with Post Traumatic Stress Disorder [PTSD], and their Hippocampi tend to be smaller, impacting on the ability to form memories and learn. The same constellation is associated with Attention Deficit Hyperactivity Disorder [ADHD] [47].

It seems, epigenetically modified genes are passed onto the next generations. The research field of transgenerational epigenetics examines the effects of pre-natal, cumulative experience of parents on offspring. Epigenetic modifications arise over a lifespan can be transmitted, i.e. behavioural experiences in adult life might influence gene expressions, neurological wiring and behaviours in subsequent generations. Thus, epigenetic changes are a critical part of the evolutionary roots of cell differentiations with lasting effects over centuries. They affect brain development and hence, mental capacity and well-being.

Epigenetic changes in parents due to exposure to toxic stress or other toxins, including drug abuse, results in molecular malformations leading to inefficient neural signaling pathways. This affects the next generation negatively in terms of poorer spatial working memory, decreased attention span and decreased cerebral volume, which plays a key role in attention, perception, awareness, thought, memory, language, and consciousness. Pre-natal epigenetic changes due to maternal stress predisposes offspring to persistent anxiety and anxiety disorders and problems with self-regulation (control failures, impulsivity, compulsive behaviour, aggression) and learning difficulties. These changes alter the structural and functional maturation of brain regions in the amygdala and the medial prefrontal cortex [mPFC], that are important for emotional regulation, social cognition, and value-based decision-making. Offspring from parents with PTSD have enlarged amygdalae, which makes them more susceptible to stress compared to individuals with average sized amygdalae.

Behaviours that seem inexplicable are deemed ‘innate’. When a behaviour is called ‘innate’, it is the result of an evolutionary process. Behaviours are innate, when the behaviour is exhibited in response to a stimulus in absence of appropriate (prior) experience. Transgenerational epigenetics are a possible explanation for innate behaviours. It highlights the fact, that our behaviour is very much a result of nurture rather than nature!

We can conclude, our mental model of the world is codified by nurture, neurally through the social environment and memes that are deemed psychological genes[48] , the imitation of behaviours via the mirror-neuron network of implicit and explicit behaviours of others and genetically, as gene expressions change with physical and psychological stimuli. All modifications are transgenerational. Genes through via the reproduction process, behaviours, mental and emotional states of previous generations are imitated and simulated by the next generation outside of conscious awareness. Thus, mental models of the world cumulate over generations and guide behaviours based on stories that are inherited neuropsychologically as well as trans-epigenetically.

Narratives are firmly in the ‘nurture-space’, as they influence the mental model of the world, neuropsychologically and epigenetically. Recursively, the mental model of the world impacts gene expressions that influence the neurological structure, which of course, processes the mental model of the world. Thus, narratives have a tremendous effect on our behaviours and how we and future generations experience life.

The challenge is to get the narrative right, relatable, memorable and to keep it relevant along the time scale. Ideally, the narrative is constructed and managed rather then left to the forces of evolution, which is a cycle of self-organization, self-regulation, lock-in, collapse, chaos and another cycle starting with self-organization.

The Transient Nature of Narratives – an Epidemiological View

Narratives function as memes, the psychological equivalent of genes. Contagious ideas competing for survival, winners manifesting themselves through cultural versions of selection as the evolutionary biologist Richard Dawkins said[49]. In his recent book ‘Narrative Economics’[50], the behavioural economist Robert Shiller describes, how narratives drive economic events including booms and busts – again evidence for the power of narratives. He uses methods from epidemiology to understand the contagion rates of stories as the patterns of narrative epidemics mimic disease epidemics. For an epidemic to ensue, the infection – rate must exceed the recovery rate or death rate, until the process reverses.

We process narratives context dependent, based on our qualia and underlying beliefs. Good narratives evoke emotions and are contagious (thanks to the MNS), so that an increasing number of people believe in it until the trend reverses, and the majority believe in a different, competing and more compelling narrative. Thus, the old narrative has lost relevance and its effect on (social) decision-making!

A lasting narrative must be kept relevant for all family members, so it can be integrated in the current mental model of the world and in the epigenetically malleable gene pool of the family. We can compare Hermeneutic with epigenetics on an intellectual level. Looking at different parts of information of a story (the gene), changing the expression and adapt it to what the environment requires (epigenetically modified gene).

Hermeneutics – The art of making and understanding meaning

Nothing in our world has ‘meaning’ by itself. Hermeneutics derives from hermeneuein = ‘to interpret’ in Greek language. The interpretative sociologists Anthony Gidden and Juergen Habermas stated, that people’s behaviour is shaped by their interpretation of the environment. Thus, hermeneutic insights are highly relevant to the working of the social world because people attribute meaning to their surroundings by interpretation and act accordingly[51]. The interpretation is driven by the individual mental models of the world that are recursively changing in social processes through communication which makes social systems autopoietic.

A ‘sender’ conveys messages originating from her subjective neural map and mental model of the world with conscious and unconscious intention in a subjectively interpreted context and social environment. The ‘receiver’ will interpret the information, context and environment based on his subjective neural map and mental model of the world. In his response, he becomes a ‘sender’ of information of which she becomes the receiver and a new iteration of information and interpretation to make meaning starts. Communication is a recursive process with feedback loops that never stops because we ‘cannot not communicate – every behaviour is communication’ to quote the Austro-American psychologist Paul Watzlawick[52]. To exist means to interact and because like every cell, we fight for our existence and survival, we seek to perpetually interact and form social systems that are defined by an exchange of information in communication. To evaluate the communication process, we attribute ‘meaning’, the currency of communication.

Thus, hermeneutics is fundamental to the link between cognitive and social dimensions as our inner world is of concepts, ideas, images, and symbols is a critical dimension of social reality. Social scientists have often referred to hermeneutic dimensions to express the view that the human language, being symbolic in nature, centrally involves the communication of meaning, and that human action flows from meaning that we attribute to stimuli. Humans are unique in the sense that we can neurally form abstract mental images that require interpretation.

Social systems are characterized by the classical 3 dimensions: on a macroscopic level there are patterns of organisation (form), on a microscopic level there are material structures (matter) and they interact in social processes. Meaning adds the fourth dimension. It represents the inner world of reflective consciousness. The understanding of a social phenomenon must include all 4 dimensions[53].

Family businesses and business families are evolutionary systems, and they typically feature metastable equilibriums[54], so equilibria states don’t last forever because of perturbation with impacts of significant magnitudes that elicit system changes. In this way, evolutionary systems have more than one equilibrium state (metastable equilibriums), loosely defined as ‘attractor states’. As described in the first section, social systems are evolutionary in nature and this needs to be accounted for in narratives. Narrative and interpretative patterns should not be static or purely cumulative. They need to be shuffled and reshuffled in search for new understandings and for new meanings to emerge. This repatterning involves the origination of new understanding which must go through a codification and diffusion process to replace the preceding ‘normality’[55].

Through hermeneutic analysis, historians allow for an iterative process between the data and the historical context in which it was produced. Hermeneutic analysis stands for interpretation that is close to the stories’ specificities and environment and highlights the differences and similarities between meanings conveyed by successive or various versions[56]. Thus, the discipline of Hermeneutics is instrumental to initiate change and to adapt to change. Through structured meta cognitions and meta emotions, reflecting on what we are thinking and how we are feeling followed by the reflection on how we reflect on those neurological processes makes repatterning possible which has implications for our behaviour. If one part of the brain can generate a new pattern (seed-pattern) different from the conditioned brain, it can begin to spread through the brain-system. Seed patterns spark the process of displacing previously dominant patterns of thinking and feeling[57] and enables humans to cope with change or initiate phase transitions by action, following the repatterning in the brain. Language is at the core of forming abstract concepts and metaphors for coordination. Most of our cognitions are occurring in metaphors[58], so together with language, they an important aspect of socially constructed reality and its dynamics.

Effective neural coupling between to brains depends on a successful processing of incoming signal patterns so that both brains can extract information (common code), i.e. language and metaphors both entities can relate to, so that both entities can extract information[59]. The brain-to-brain coupling substantially diminishes without common language. The same is true when a recipient receives signals h/she cannot relate to. With the help of language and hermeneutics we improve the effectiveness of communication (language & meaning) and thus, foster the all-important brain-to brain coupling.

The same event can be described and interpreted in different ways, giving rise to different ways of perceiving, and understanding it. Narratives will influence the recipient’s subjective mental model of the world in different ways. Processing information from narratives, which requires the hermeneutic capacity to configure signals into meaningful patterns[60], is based on a recursive relationship of reception, perception, and storing, based on previous experiences stored and the perception of the current context– the personal story (the initial condition). The personal story is stored neurally, somatically and genetically as described above. Thus, interpretation is intrinsic to all human knowing and judgment, as it is not reducible to the knowledge of material conditions.

In short, hermeneutics is the art of understanding, making sense of the world[61] through interpretation and meaning. It is the about the integration of information into a meaningful whole, motivated by personal interests, concerns and desires that are influenced by culture and paradigms. This integration leads to the social construct we call reality, and it happens on a conscious as well as on an unconscious level. To understand reality, we need to understand the context which influences how we understand a particular part. Ultimately, we are all connected through a path-dependent history. Thus, it is illusory to believe, that self-thinking in isolation as a possibility. Inevitably, all thinking, and perception is influenced respectively shaped by context, culture, and prevailing story, be it implicitly or explicitly. So is the illusion of knowledge: the knowledge human mankind is distributed in various minds and stories[62]. As finite human beings, we only have partial access to knowledge, thus, knowledge is a collective, not one individual alone has got the knowledge. The question is, how can we access the knowledge of others. Stories are a viable mean, but they are cut-off from living speech and must relate meaning differently. Meaning comes from teleological interpretation, so all meaning making requires choice and results in a hypothesis.

Mentalizing, ordering and integrating the fragments of knowledge into a coherent representation that makes sense to us and gives meaning on an ongoing basis is the challenge at hand. The exegesis of narratives, i.e. the analyses and reconstruction of stories and patterns must take into account the historical and current context and leaves a lot of room for choices (freedom degrees). Either one adopts a positivistic approach and constricts meaning or focuses on intuitionism and re-constructs the story the way the reader purposefully wants to understand the story. This gives even more room for choice of course. Even if the text is the same, the meaning changes with the personal, motivational perception of the reader. The construction of meaning requires an artful integration of fragmented details into a coherent whole through acts of imagination based on personal experience, which is held in the personal mental model of the world as discussed above. Panta Rhei, every story needs to evolve. For example, “second-generation entrepreneur stories are less about overcoming disadvantage than they are about overcoming advantage”[63]. So, we need to integrate something unfamiliar into our familiar way of seeing things, seeing similarities in differences and enlarge our perspective by making new connections and meaning. Over the life cycle, family business narratives need to be transformed to different extents to ensure the validity and effectiveness. And it is a much needed, although difficult, endeavour for the family to avert being stuck in a certain frame, which could be linked to the identity of its founder, for example. Transforming a narrative means to go beyond the existing identity or identities by the affirmation of differences. Going beyond the stalemated status of cultural involution requires intervention by outsiders that help disintegrating and fragmenting past narratives and reworking them on re-signifying and repurposing the existing cultural heritage[64].

Thus, every story must be redacted, starting by traditions to make new connections, which requires imagination and dialogue. It is about the accumulation, configuration, and re-configuration of patterns in a way that gives much expression to interconnections of patterns. A single act of pattern recognition is inherently static, where patterns are treated as having a fixed meaning, usually summarized in a conclusive statement.

The dynamic movement from one pattern to another i.e. evolution and transformation is a fact of life and our existence, so we need to combine the known with the unknown bidirectionally, the determined and the emergent in multiple acts of recognition and interpretation. The absence eliminates freedom degrees, makes social systems rigid and ultimately leads to fundamentalism or ‘Familyisms’[65], memes that are no longer useful but clung on.

The organizational imprinting hypothesis describes how certain behaviours are reinforced within organisations. At the beginning i.e., in the sensitive period (the formative years), organsational practices are established and partly self-organise into structures. Due to subsequent inertia to change, these (multi-layered) imprints are defined as values and rules of business conduct and personal interaction and are imposed on an individual or the collective and can persist, even if the world has changed[66] and thus, may be limiting and no longer be useful.

Familyisms correspond to the notion of traditions: beliefs, customs and practices that are consciously (and unconsciously i.e., tacit traditions) transmitted to the next generation and how family businesses build socioemotional wealth. Traditions describe the uniqueness of innovation or the lack hereof in family businesses. recently, most research suggested that family businesses tend to be less innovative than nonfamily firms because of the deference to tradition and the need to maintain a consistent identity[67].

Family businesses struggle with the tension between the need to maintain a continuous and coherent identity (internal world) and the need to adapt to the changing demands of the present or the future (external world – the environment). While all firms struggle with this tension, it is felt more acutely in family businesses because of the (interpreted) overarching need to honour the values, beliefs, and vision of the founder (family). As a result, family businesses tend to privilege continuity over change—despite their (dormant) ability to follow through on innovation projects—a phenomenon referred to as the “innovation paradox”[68]  But holding on to continuity is illusory, since change is the only constant in life, be it social organisations or social organisms or even individuals. Reinterpretations would help the case.

Apparently, there is growing body of research that reinforces the awareness of the foundational role that traditions play in family business identity and decision making[69]. But traditions must be interpreted and re-interpreted in an ever moving present if they are not to dampen human agency. By reinterpreting old traditions in new ways, current generations can express their agency and legitimacy in the present, by adapting rather than adopting the voice of the past[70]. Other suggests that family businesses can be quite innovative but are constrained in how innovation might be expressed by their deference to tradition. To add to the conflicting results, a recent meta-analysis concludes that family businesses have little constraint on innovation output but, relative to their nonfamily peers, simply invest less in innovation in the first place A rhetorical history lens, by contrast, focuses on the tradere, or the construction of meaning that occurs by the process or act of transmission across generations[71]

So, it is evident and essential for any kind of agency and innovation, that families have a story they can relate to and identify with dynamically by analogical reasoning (i.e., allowing a static document drafted generations ago to be reinterpreted in the context of present circumstances) and integrating new information. The family needs to create and keep the meaning of the story during the situational dynamics that occur in their specific spatiotemporal existence. A narrative of quality is persistent, it functions as a meme and provides an anchor, a common social attractor that fosters the cohesion of the social system, thus, it becomes and remains the social glue of the family because it is dynamic. But this is easier said than done. Narratives must be created in a way that everyone can connect to it through a co-creative process.

This process can be facilitated by Narrative Governance, which is an iterative creation and meaning making process.

Narrative Governance

There are two interdependent, recursive processes in narrative governance. The diverse fragments of a narrative must be identified, interpreted and brought together in a comprehensive and coherent representation of the narrative in the gestalt of an epistolary novel[72] , that allows the mentalization of the past and conveys the experience of e.g. the founder of the business as he built it. It should be in a way that it elicits empathy and projective identification of recipients are real enmeshment in his or her story. Historical events are not easy to reconstruct. Incomplete information must be artfully inferred, augmented and completed by the author as well as by the recipient by making inferences, modelling the unknown by the known based on as many facts as possible.

Narrative fragment inventory [NFI]

It is the first stage of participative repatterning, identifying individual stories – the raw material that provides the basis for a comprehensive systems analysis and finally, a uniting story. It is a data collection and data interpretation exercise, not just a fact-finding mission!

Patterns of thoughts and feelings about the past and present need to be articulated with the help of progressive elicitation, so that tacit knowledge becomes explicit knowledge that can be shifted into new configurations. Members of the system need to be interviews about the history of the current situation and should be engaged in own analysis and interpretation of facts to surface their mental models of the world.

Narrative fragments have various degrees of fluidity across generations (laterally) but also with generations (vertically). They can be stable, abstracted, reframed, generalized, distorted and deleted from conscious memory.

The various narrative fragments can convey multiple meanings to various stakeholder groups depending on the degree of emotional and spatial separation between individuals who experienced the actual events and those simply retelling or hearing them.

The interviewer should permit the interviewees to select topics according to the relevance they assign to avoid any biases introduced by the interviewer listen out for interdependencies, contradictions, curiosities, contradictions between answers and accounts of events and for different interpretations which are to be reconciled, especially in the co-creation process of the Family Narrative. It is not only learning what people think and feel, but also about WHY they exhibit these patterns in various contexts.

Narrative fragments are (like all stories) subject to multi-layered interpretations and perceptions and meta interpretations and perceptions (see section on Hermeneutics) and consequently convey various meanings leading to a variety of outcomes.

How we create the future is influenced by the past and present, i.e. it is path dependent. Families need to have sufficient information about the sequences and bifurcations that happened in the past embedded in historical context, as it informs the presence and the future, that is, the choices they will make for creating their future.

All family members know bits and pieces of the family narrative, from the past and from the present. Some fragments are in their conscious awareness, many are not, some are talked about, other fragments are kept as an open secret under the lid of social norms. Narrative fragments are often held unconscious, buried deep inside the memory and hence, must be extracted. Yet, regardless of the awareness status, all narrative fragments influence the family system and even if narrative fragments are unconscious, they can disrupt the dynamics of a family system in perilous ways. Thus, it is essential to bring all narrative fragments to the surface and edit them with conscious awareness. Hence, the first step of narrative governance should be a detailed ‘narrative capture’ and content creation in a coaching process that facilitates the creation of a narrative – fragment inventory of all family members in conjunction with context dependent interpretations of these narrative fragments on an individual level.

Co-creation of the family narrative

After all family members have contributed to the NFI, the fragments need to be brought together in order to create a catalytic understanding of the systems’ current state and to form a coherent and accepted, representation of the family narrative that is rewarding to read because it is more than the sum of its parts with sensory rich language, evoking emotions and rich imagery. Effective, participative repatterning requires systemic coaching practices and facilitations to integrate and embed the various fragments and interpretations to one narrative that family members accept and happily own. Based on this narrative draft, a qualified author formulates a script in a language the family can relate to. The family history unfolds seamlessly from beginning to end, a temporal moment which is accepted as the presence. It leaves the reader with the perception of an integrated story, highlighting cause and effects of actions that influences their perception of the system and system dynamic.

The result should clarify all complex interdependencies of the system unambiguously (system awareness). However, the capacity to play with the temporality of the narrative is a defining characteristic of narratives[73] . It should raise the attention, get the working memory and conscious awareness going. The narrative structure plays with the decentralized, asynchronous processing of the brain that is constantly seeking to synchronize and integrate information. Thus, the artful telling composes temporally disjunct subunits of events, episodes and conflicts created through situations, expectations, opinions, knowledge, values and beliefs to create patterns of equilibrium and disequilibrium.

Reading the family history should entail the alternation between theme and horizon that actively involves the reader in the process of synthesizing an assembly of constantly shifting viewpoints, observation made from moving positions. The author should manipulate the perceived chronology to provoke curiosity, suspense or surprise through temporal disjunctions that play with the tension between concord and discord patterns[74]. Temporal patterns of segmentation and integration create some entertainment value with historical content and within historical context. The recipients should be able to associate with the actions, the persistence in the face of risk and danger, the ability to recover and learn from adversity, calamity and failure i.e. to imagine and simulate thoughts, actions and feelings. Simulation is the reenactment of perceptual, motor, and introspective states acquired during experience with the world, body, and mind[75]. Brain regions responsible for the action have found to be stimulated by virtual imitation which is possible via the mirror neuron system [MNS] in our brains as discussed above. Felt emotions are accompanied by and are intertwined with thoughts, that give emotions shape and meaning. This way the family narrative should become an embodied cognition through experience.

Embodied cognition is a holistic, complex process involving body, brain and the environment. Human reason is structurally shaped by our bodily (phenomenological) experiences, brains = minds in conjunction with the social environment, as a living system couples to its environment structurally through recurrent interaction, each of which triggers structural change in the interacting system in response and through which it learns – i.e., the human being[76]. Even if we cannot change the system per-se, we can perturb it through embodied cognitions and trigger changes, which manifest in self-re-organization of embodied cognitions. In other words, people feel and think differently about things.

Francesco Babera et. al., observe that retelling the family story can create a common language (pivotal for shared and effective communication and thus, the synchronization of interbrain activities as discussed above), that enhances the stability of the legacy story with detail abstracted into a more succinct or usable message[77], which can be used as the basis for affirmations to foster inter-brain synchronization.

Consequently, it stands to reason that reading or listening to a narrative that imitates an action (and provoke emotions and embodied cognitions) would have practical effects on the brains and bodies of the recipients and on their capacity for acting in the world[78].

After the whole family ratifies the document, it can be bound in a book format, allowing for re-editing and re-interpretation respectively the continuation of the narrative. As discussed above, it is paramount to keep the narrative relevant and useful for everyone individually and for the system. It is important to update and refresh narratives and keep family members connected to the narrative they have co-created. Current or recent events that are deemed significant by the family, must be interpreted, agreed upon and integrated. Historical events must be interpreted not only in historic context but in current context, so that future generations can relate to the family narrative just as the generation that wrote it.

When narratives evoke emotional responses, they are not only becoming more memorable (emotional markers based on multi-modal, sensory rich language), but they intertwine us with each other by coordinating the temporal processes of through which our experience of the narrative unfolds. The social power (glue) of narrative emotions derives from their ability to intertwine our experience of time and this subjective phenomenon is intersubjectively shared[79].

Family Narrative or Family Constitution?

Narratives help to mentalize and connect to the history of the system and its current state, they inform the present and expectations about the future and coordinate neural activities of people. They have strong adhesive properties in social systems as long as all members of the system think and feel the narrative and memes are relevant to them. Narratives are overarching principals, meta-frameworks that influence decisions and behaviours. It has been shown that people who have a shared goal and shared purpose are more likely to reduce their ego dominance which increases the propensity to cooperate. Ideally, the narrative constitutes such a shared purpose that motivates family members to unite and to cooperate in various contexts. Narratives that work don’t simply fix a problem on the surface – they heal a system as they go very deep in a neurological sense and work on the root causes – the WHY – as they work on the bottom of the iceberg emersed in water invisible to the eye of the beholder.

Narratives create system awareness and a shared context within context, they are about understanding patterns of relationships and their transformative changes in multiple, spatiotemporal spaces.

Previous studies showed coupled and synchronized brain responses to shared external input -be it visual information or auditory information, suggesting that verbal information is just as powerful when it evokes images. Furthermore, verbal information enables us to directly convey information across brains. Thanks to brain-to-rain coupling, this information can be spatially- and temporally remote in the absence of stimuli other than language[80].

Narratives are metaphors that linguistically create images in our minds enable multiple, coupled neural response patterns. Thus, narratives are highly accessible as they are mostly stored in the semantic memory section and help to imagine the future, whereby they engage the default mode network [DMN] in our brains. It is instrumental in the integration of internal and external experiences and stimuli and is active when the brain is at rest, i.e., when it is not engaged in a specific attentive activity and where dreams are processed. It entails remembering and reflecting on the past and imagining the future, conceiving the viewpoint of others and spatial navigation. These interactions between remembering (reflecting) and imagining suggests, that narrative construction (and reconstruction) is processed in the DMN in the brain[81] . It processes information effortlessly, mostly in the right hemisphere in conjunction with pictures and creativity. The DMN can process information in parallel and is engaged in daydreaming, e.g. in self-referential reflections about beliefs, interpretations of experiences, sense and meaning making , simulations of the future self, respectively social and moral cognitions by the way of ruminating about mental states and emotions of others (narratives of others), i.e. internalizing subjective interpretations of other peoples’ actions in relation to own beliefs, goals and experiences derived from social processes[82].

Processing the family constitution is a different matter. Dry verbal language in family constitutions is limited and restricted to logical processes and often focus on the ‘WHAT and HOW’ of fixing a problem and optimize parts of the system in isolated from other parts – they only target the tip of the iceberg, i.e. the symptoms but not the causes.

Family constitutions are inspired by a technological culture reinforced by cultural and academic conditioning and world view propaganda that fixes problems mostly out of context and thereby risking many unintended consequences and dependencies.

Another point is how we process the content of family constitutions. A family constitution is about understanding and applying the principles, rules and regulations laid out in a (quasi) legal document. Information related to family constitutions tend to be stored in the episodic section of the memory and processed in the cognitive control network (CCN) in our brains which is responsible for the executive functions involving the pre-frontal cortex (dlPFC). Processing content from a family constitution is an attention and task- focused brain activity is effortful, a sequential process that requires way more energy and time than the DMN would use.

Finally, narratives processed in the DMN allow for more degrees of freedom than the CCN processed information of a family constitution. The combination of both is a winning strategy because, family narratives and family constitutions are complementary. Like in the iceberg example, we need to take a holistic view and work on the symptoms (tip of the iceberg) that a rarely spatiotemporarily coincide with their root causes (invisible lower part of the iceberg). Thus, Narratives are a great basis for family constitutions, which are more specific and operational about organizational principles of a business family and thus, have less freedom degrees.

A combined family governance that allows for a holistic solution and a balanced blend of ‘freedom degrees’ makes the family system resilient and even anti-fragile. Thus, the system manages shocks very well, learns and emerges as a system which is even more resilient.

Conclusion

Narratives are a pivotal system-intervention, important for the existing family system to manage unfolding change processes in line with a family-defined trajectory, but also variations of existing dimensions and relationships within the family, which tip the system into new configuration of relationships (e.g. succession) but also in evolutionary change processes, where new dimensions or new features are added e.g. through transitional events at the family level (birth, death, marriage, divorce) or external level (e.g. introduction of an external CEO) where new system emerge and sustain.

Narratives are essential for family-system resilience, which is especially important in a world of VUCA and turbulent changes. The degree of success in dealing with exogenous shocks to family systems is a function of how quickly the family system can react and adapt (adaption capacity). When the family system is prone to endogenous shocks it is fragile and consequently, it cannot be resilient. Even worse, exogenous shocks can provoke endogenous shocks and ruin what previous generations have built in a short period of time. The loss of socio-emotional and financial wealth of business families through system shocks is often observed in the 3^rd generation: the 1^st generation builds the wealth, the 2^nd generation is not really invested in but they carry on regardless, trying to figure out how things work based on the information they snapped up and take over. The following 3^rd generation is mentally distanced, financially comfortable but do not really understand what it entailed to generate their physical well-being because no one took the time to tell and connect them to the family story. Nonetheless, the family story drives many behavioural and relational patterns, mainly outside our conscious awareness though. The 3^rd generation may find it difficult to behave responsible and accountable with respect to the family history because they don’t have any to go by. Instead, they compensate the void that they are left with, which can result in overspending, entitled behaviour and jeopardize the good reputation of the family. A common family narrative allows the family system to heal as it mentally connects the past and the current generations. It contributes significantly to the resilience of the family system and thus, it is a vital investment for generations to come. All other family governance activities, such as the process of creating family constitutions should be smoother when it is firmly embedded in a co-created family narrative.

Summary

We have established that social systems are dynamic and change frequently, how narratives are created and influence the dynamics of a social system and system elements and increase the adaption capacity, how they are represented in our mind and that it is necessary to engage in a mindful process of narrative co-creation which must result in people associating with the story through mirroring, imitation and simulation as well as identification to foster the desired co-intentionality and prosocial behaviours. Furthermore, we have established, that it is paramount to engage in a perpetual co-creating process of ‘narrative meaning’ and retelling it, to keep the narrative represented in the collective mind and relevant for everyone. Only then can the narrative unfold maximum effect for current and future generations and create collective psychological ownership. We highlighted the fact, that narratives have a meta-status and other typical family governance activities like the creation of family constitutions are guided by the principles provided by the narrative (narrative embedded family governance). In contrast to family constitutions that are mostly treating symptoms, narratives are targeting the causal structure of the system and they are remembered and retrieved effortlessly. Narratives have more degrees of freedom and engage brain regions, that are active when we relax. Thus, it is not about creating a family constitution or a family history. Both are vital instruments to organize, regulate and future proof the social system we call ‘business family’.

Acknowledgements

I like to thank Mike Sergeant, media trainer (London) for asking the question if business families could be interested in narratives services and Zita Nikoletta Verbenyi, founder of The Legacy Atelier (London), for highlighting the importance of interpretation and Hermeneutics in this context.

 

[1] The Socio-psychological Challenges of Succession in Family Firms: The Implications of Collective Psychological Ownership, Noora Heino, Pasi Tuominen, Terhi Tuominen, and Iiro Jussila in “The Palgrave Handbook of Heterogeneity among Family Firms”, Palgrave McMillan

[2] Illusions of Human Thinking, Gabriel Vacariu, Springer

[3] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson et.al, HHS Author Manuscripts, 2012

[4] System Thinking for a Turbulent World, a Search for New Perspectives, Anthony Hodgson, Routledge

[5] Creating a Purpose-Driven Organization, How to get employees to bring their smarts and energy to work , Robert E. Quinn, Anjan V. Thakor, rom the Harvard Business Review Magazine (July–August 2018) https://hbr.org/2018/07/creating-a-purpose-driven-organization?utm_medium=social&utm_campaign=hbr&utm_source=linkedin

[6] Based on an example in Embracing Complexity, Strategic Perspectives for an Age of Turbulences, Jean G. Boulten et. al., Oxford University Press

[7] The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[8] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[9] https://en.wikipedia.org/wiki/David_Hume

[10] The Social Neuroscience of Attachment, Pascal Vrticka in ‘Neuroscience and Social Science, Springer

[11] Narrative Economics, Robert J. Shiller, Princeton University Press

[12] The Relational Lens, John Ashcroft, Roy Childs et.al., Cambridge University Press

[13] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[14] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[15] Thinking in Complexity, Klaus Mainzer, Springer

[16] Organizational Epistemology, CH5, Kasara Seirafi, Springer

[17] Framing Effects: Behavioural Dynamics and Neural Basis, Xiao-Tian Wang, Lilin Rao, Hongming Zheng in Neuroeconomics, Springer

[18] Thinking Fast and Slow, Daniel Kahneman, Penguin

[19] Framing Effects: Behavioural Dynamics and Neural Basis, Xiao-Tian Wang, Lilli Rao, Hongming Zheng in Neuro Economics, Springer

[20] Consumer Neuroscience and Neuromarketing, Bernd Weber in Neuroeconomics, Springer

[21] Framing Effects: Behavioural Dynamics and Neural Basis, Xiao-Tian Wang, Lilli Rao, Hongming Zheng in Neuro Economics, Springer

[22] System Thinking for a Turbulent World, a Search for New Perspectives, Anthony Hodgson, Routledge

[23]Professor Steven Strogatz, researches complexity and chaos theory and looks at various instances of spontaneous synchronisation and self-organisation is his book “Sync: the emerging science of spontaneous order (penguin press science)” 

[24] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson et.al, HHS Author Manuscripts, 2012

[25] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[26] The Student’s Guide to Social Neuroscience, 2^nd Edition, Jamie Ward, Routledge

[27] Neurobiological Approaches to Interpersonal Coordination: Achievements and Pitfalls, Carlos Coprnejo, Zamara Cuadros, Ricardo Morales in Neuroscience and Social Science, Springer

[28] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[29] The Student’s Guide to Social Neuroscience, 2^nd Edition, Jamie Ward, Routledge

[30] Compare Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson et.al, HHS Author Manuscripts, 2012

[31] Coupled Neural Systems Underlie the Production and Comprehension of Naturalistic Speech, Proceedings of National Academy Of Science

[32] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson et.al, HHS Author Manuscripts, 2012

[33] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson et.al, HHS Author Manuscripts, 2012

[34] Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson et.al, HHS Author Manuscripts, 2012

[35] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[36] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[37] Antonio Damasio

[38] Wired to Grow, Britt Andreatta, 7^th Mind Publishing

[39] The Neuropsychology of the Unconscious, Efrat Ginot, Norton

[40] Molecular Genetics, Martin Reuter, Andrea Felten, Christian Montag in Neuroeconomics, Springer

[41]The Student’s Guide to Cognitive Neuroscience, 4^th Edition, Jamie Ward, Routledge

[42] Epigenetics, Frank Brown, Amazon

[43]The Student’s Guide to Cognitive Neuroscience, 4^th Edition, Jamie Ward, Routledge

[44]Epigenetics, Frank Brown, Amazon

[45]The Student’s Guide to Cognitive Neuroscience, 4^th Edition, Jamie Ward, Routledge

[46] CDH13

[47] A brief history of everyone who ever lived, the stories in our genes, Adam Rutherford, Weidenfeld & Nicholson

[48] Synch, the emerging science of spontaneous order, Steven Strogatz, Penguin

[49] Sync, the Emerging Science of Spontaneous Order, Steven Strogatz, Penguin

[50] Narrative Economics, Robert J. Shiller, Princeton University Press

[51] The Systems View, Luigi Luisi, Cambridge University Press

[52] https://en.wikipedia.org/wiki/Paul_Watzlawick

[53] The Systems View, Luigi Luisi, Cambridge University Press

[54] Introduction to the Theory of Complex Systems, Stefan Turner et.al. Oxford

[55]System Thinking for a Trubulent World, a Search for New Perspectives, Anthony Hodgson, Routledge

[55] The strategic use of historical narratives in the family business, Rania Labaki, Ludovic Cailluet, 2018, https://www.researchgate.net/publication/332549229

[57] System Thinking for a Trubulent World, a Search for New Perspectives, Anthony Hodgson, Routledge

[58] The Systems View, Luigi Luisi, Cambridge University Press

[59] Speaker-listener neural coupling underlies successful communication, Greg. J. Stephens et.al, Proc Nati Acad Sci 2010

[60] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[61] Hermeneutics, A Very Short Introduction, Jens Zimmermann, Oxford

[62] The Knowledge Illusion, the myth of individual thought and the power of collective wisdom, Steven Sloman & Philip Fernbach, Pan MacMillian

[63] The strategic use of historical narratives in the family business, Rania Labaki, Ludovic Cailluet, 2018, https://www.researchgate.net/publication/332549229

[64] Based on R. Labaki et. Al., in The Palgrave Handbook of Heterogeneity Among Family Firms, Esra Memili, Clay Dibrell, Palgrave McMillan

[65] Pers. Comm. Zita Nikoletta Verbenyi (2019)

[66] Compare with: The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[67] Compare with: The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[68] Managing Traditions: A Critical Capability for Business Success, Roy Suddaby, Peter Jaskiewicz, Family Business Review

[69] Managing Traditions: A Critical Capability for Business Success, Roy Suddaby, Peter Jaskiewicz, Family Business Review

[70] Managing Traditions: A Critical Capability for Business Success, Roy Suddaby, Peter Jaskiewicz, Family Business Review

[71] Compare The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[72] Like Goethe’s ‘Sorrows of Young Werther (1775) or the satiric counter-version by Friedrichs Nicolai, ‘The Joy of Young Werther’ in the same year

[73] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[74] Stories and of Life, Fritjof Capra the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[75] Perceptual Symbol Systems, Lawrence W., 1999, Behavioural and Brain Science 22:577-660

[76] The Systems View, Luigi Luisi, Cambridge University Press

[77] The Development of an Entrepreneurial Legacy: Exploring the Role of Anticipated Futures in Transgenerational Entrepreneurship, Francesco Barbera et. al., Family Business Review

[78] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[79] Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[80] Compare: Brain-to-Brain coupling: A mechanism for creating and sharing a social world, Uri Hasson et.al, HHS Author Manuscripts, 2012

[81] Memories of Sleep and Dreams: The Construction of Meaning’, 2011) in Stories and the Brain, the neuroscience of narrative, Paul B. Armstrong, John Hopkins University Press

[82] Rest Is Not Idleness: Implication of the Brain’s Default Mode for Human Development and Education (2) in Emotions, Learning, and the Brain, Immordino-Yang, Norton

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Table of Contents[i]

Abstract 1

The Emergence of Consciousness and Culture. 2

The role of conscious culture in social systems perturbed by generational succession. 6

Consciousness in business families. 8

Consciousness in family leaders. 10

Culture in business families. 10

Conscious culture. 10

Summary. 13

Abstract

This paper discusses the importance of conscious culture for the success of family businesses. The term ‘culture’ has a long history and is now used in different intellectual discipline with diverse and sometime confusing meanings[1]. We focus on the anthropological interpretation. Culture is a distinctive way of life of a people in social systems that defines social reality. It comprises social norms, socially acquired values and beliefs that delimits the range of accepted behaviours. Culture is an emergent property that arises from a complex, highly non-linear dynamics by recursive social process defined by explicit and implicit communication.

We will highlight the importance of culture for social dynamics in business families and the latest addition to the term: ‘conscious’ culture.

 

The Emergence of Consciousness and Culture

Consciousness is the ability to experience reality, to be aware of our inner and outer worlds. It allows us to adapt to our environment and act to pro- mote our lives. All living beings possess consciousness, but human beings have a unique kind. Unlike plants and other animals, we can think and act beyond instinctual drives and conditioning. We can be autonomous (from the Greek, “self-governing”). While this autonomy is a possibility, it is not a given. We must develop it through conscious choices[2].

Consciousness is an expression of life, an emergent mental state, a process and phenomenon that still cannot be explained and analyzed to the full extend by neuroscientific methods. So far, we cannot locate conscious experience in one region of the brain.

What we know is, our neurological structure generates consciousness, but what does it emerge out of? Consciousness is a neural process which occurs in our mentalizing network of which much is located in the prefrontal cortex rsp. in the cognitive control network, where executive functions like top-down attention focus, reasoning, abstractions and awareness are processed. Subcortical regions like the amygdala (threat detection and response) and the reward circuitry (ventral striatum, nucleus accumbens), the anterior cingulate cortex (error detection) the thalamus (stimuli selection and attention focus) and the insula (involved in processing bodily experiences) are also involved in generating consciousness awareness for bottom-up and top-down attention.

So, consciousness is not to be seen in isolation. It is a combined product of constant, bidirectional communication and interaction with sub-cortically driven ‘other-than-conscious’ processes that tend to dominate conscious processes and mental states.

We can say that conscious processes are emerging in conjunction with subconscious bodily processes. Other-than-conscious processes are always in action (even during sleep) and in interaction with the internal and external environment, guiding conscious awareness, intentions, perceptions and actions. Thus, other-than-conscious processes leave fingerprints on all our mental and phenomenological experience, our subjective mental model of the world and corresponding beliefs and expectations.

The difference between conscious awareness and the realm of other-than-conscious processes is a function of successfully competing semantic markers that reach a critical level of neuronal activity and signal strength.

Semantic markers (respectively semantic pointer theory as it is called originally) can be applied to mental concepts, rules analogies, emotions, action and intentions, language and meaning, beliefs and values, creativity, the self, and finally – consciousness and perception[3].

Semantic markers can be described as vectors that build our mental model of the world, which defines how we perceive the world and how we respond to it.

These semantic markers are basically complex neural firing patterns across assemblies of neurons creating sub-systems, that drive perceptions and actions based on integrated cognitive and emotive information. They consist of recursive bindings of simple neuronal representations of multi-sensory stimuli, derived from experienced stimuli including associated emotions that are generated and maintained through neuronal firing patterns running on distributed networks in our brains.

Multi-sensory binding means that we associate various neural stimuli that occur on a given spatiotemporal scale and build combined representations which emerge into complex, semantic markers. For instance, a smell from a scenic landscape we wander through and value highly and we form the belief it must be protected by all means while feeling relaxed and happy because from this experience our purpose to safeguard the environment emerges which provides the basis for the development of goals and strategies to service the purpose that has emerged. This embodied experience is codified and compressed in a semantic marker which is more than the sum of its parts. It is a sentence like structure, a created concept and neural symbol pointing to a fuller semantic content.

Perceptions occur with mixed awareness levels and works also through semantic markers. It converts internal or external sensory inputs into symbolic structures[4] i.e., semantic markers as input vectors and the mind searches for matching semantic markers or response vectors within the neural structure in order to create the most suitable output vector, based on inferences i.e., a neurally calculated, intentional and malleable probability. So, the neural state described above is reconstructed based on semantic markers, triggered by internal or external stimuli like smell and can only reach consciousness depending on signal strength.

More precisely, consciousness is a multilayered self-organizing, dynamic, neuronal firing process with structural coupling, characterized by reinforcing (excitatory neuronal relationships) and diminishing (inhibitory neuronal relationships) feedback loops that can morph into neural symbols made of semantic markers that are malleable[5]. For conscious awareness the net result of neuronal, semantic marker activity needs to generate sufficient signal strength in order to reach the threshold of the limited resource we call ‘consciousness’ Conversely, when neuronal activity is reduced, the signal strength falls below the threshold and the information slips out or conscious awareness.

Typically, we become conscious on what we focus attention on. Brain resources are focused on what is important to our organism driven by internal or external bottom-up stimuli or top-down, by motivations, intentions and emotions. And what we focus attention on, we become consciously aware of. Most important in this context: attention and neuronal firing patterns can be shifted via cognitive appraisal! Behavioural intervention on a reflective consciousness level can enhance or reduce neuronal firing rates and the synchronicity of competing patterns. The amplified neuronal activity reaches the threshold and new information (re)-enters conscious awareness.

Targeted behavioural Interventions can create consciousness also on a social system level. Regular meetings and discussions about social system dynamics by frequent (re-) interpretations of culture, social norms and applied hermeneutics, i.e., the art of understanding and making ‘meaning’ of culture, can generate sufficient signal strength in order to perpetually reach the threshold of conscious awareness.

We are obviously alluding to reflective consciousness, which is unique to humans, because it requires the building and holding of mental images and abstraction in various spatiotemporal dimensions with the help of language, communication and interpretation (forming and re-forming semantic markers). This ability is essential to develop culture as allows us to form conceptual thought such as identity, values, beliefs, purpose, goals and strategy.

Culture is a meta-narrative that provides a meta-frame which shapes social cognitions, social expectations, motivations and social- as well as moral emotions along the consciousness continuum. Culture answers deontological questions about how things should be done.

Culture works on a conscious and unconscious level! Cultural norms on higher consciousness levels also innervate lower, other-than-conscious networks that in turn, impact behaviours on a conscious level. It affects attention focus and learning patterns[6] perceptions, and actions. It leads to inattentional awareness and inattention outside conscious awareness. This in turn affects culture which we can see as boundary condition.

But where does culture come from? Like ‘consciousness’, culture is an emergent property derived from the dynamics of social organisms. It is created by an autopoietic self-organising, dynamic social process of intersubjective, explicit and implicit communication[7]. It is a social mechanism for the transfer of semantic markers[8], which takes place in a recursive process with feedback loops that never stops, because we ‘cannot not communicate – as every behaviour is communication’ to quote the Austro-American psychologist Paul Watzlawick[9]. Furthermore, to exist means to interact[10]. Like every cell, we humans fight for our existence and survival, so we seek to perpetually interact and form social systems that are defined by an exchange of information in communication. To evaluate the communication process, we attribute ‘meaning’, which is a multidimensional, relational interpretative process that results in a social construct that can be seen as the currency of communication. Neurologically, meaning making is complex: it depends several different kinds of nested interactions of synaptic activity among neuronal assemblies embedded into the neural processing of context and social environment. The interpretative meanings of boundary conditions feed back into any meaning making process.

Collective meaning making and collective values, beliefs, purpose and goals lead to the social construct we call ‘culture’. But culture is not always helpful. At the time of creation, it provides social utility for the many, but boundary conditions may have changed due to social interactions influenced by culture and suddenly – it is outdated. A minority may be endowed to the perceived utility derived from the old culture, but the majority does not and may initiate change that might be turbulent and ridden with frictions, tipping the social system into chaos. Systems go through transition phases and can re-emerge stronger because of the high degree of adaption capacity, which is rooted in culture. A lack of adaption capacity leads to rigid systems and risks the collapse of the system into chaos. But even without detectable big, perturbational events – systems are constantly transitioning from one state to another on any spatiotemporal scale. Every time you take a look at the system, you only see a snapshot of a system in transition[11], it only seems to be in a stable state. In reality, it exhibits constant variations.

 

The role of conscious culture in social systems perturbed by generational succession

Family succession is not just a transfer from one generation to the next, but from one culture to another. In general, to create long-term success, family members have to transform their underlying mindsets by embedding more conscious mental models (mindsets) and behaviors

Victim: Unconsciously focusing on factors outside of one’s control and blaming others/circumstances. Passivity and lack of willingness to step up. Knower: Unconsciously treating views as objective truth and lacking curiosity to alternative views. Closes down options that others may contribute. Attached: Being so attached to results, at any cost, and unconsciously sacrificing personal values/integrity.

Player: Consciously focusing on what is under our control and what we can do to improve the situation. Drives performance and results. Learner: Curious to understand views of others and alternative perspectives. Encourages family engagement and real understanding of stakeholder needs. Integrity: Consciously acting in accordance with personal values and acting with integrity (e.g., not saying “Yes” when you mean “No”).

Successions are major perturbational events, that require conscious mind sets. Generational handovers are a prime example for large, significant perturbations with ambivalent outcome options. They are reoccurring perturbations that re-gestalt systems and the success or failure of the transition outcome very much depends on the prevalent culture, which shapes our mental model of the world respectively our mindsets. The outcome of this transition phase very much depends on the cultivated mindsets[12] of the protagonists. The knower-mind-set as described in the left box above is basically what is called a fixed and soldier mindset. It is easily threatened by challenges and does not belief in the ability of adaption, radical changes and learning. It exhibits a strong self-protection bias, tends to defend positions (often interpreted as ‘ego’) and is less likely to focus on common interests. It is a rigid mindset that demands controlled adoption of the old way, cementing the traditional culture and prevents successors to ‘be’ themselves and influence the culture, which hinders natural system-evolution and frustrates successors because they feel they are denied agency. This rigidity can be detrimental to the desired outcome of a successful succession in an ever-changing environment that can be intensely dynamic in our VUCA world.

Conversely, the learner-mindset described in the right box above can be compared to what is called a growth and scout mindset, which has greater adaption capacity. It is intrigued by challenges and contradictions to the current mental model of the world that inevitably come with successions. Someone with a growth and scout mindset beliefs, that new stimuli are an opportunity to grow and learn by adapting the mental model of the world with agility in a way, to improve navigation capabilities and manage transition with successfully.

Culture is shaping mindsets that are key for system evolutions and phase transitions of any sort, which has wider implications than successions. In fact, the advantages of family businesses are rooted in their specific mix of private and business-culture, their attitudes, responsibility respectively accountability, and endowment to the business, which often includes the region the business is operating in. The Austro-American management consultant and founder of modern management Peter Drucker once said: ‘culture eats strategy for lunch’[13]. This is further substantiated by The Conference Board CEO Challenge: ‘The cultural DNA of an organisation is critical to success, from operational efficiency to better customer service, to greater talent attraction and retention, to higher levels of business performance and breakthroughs in innovation[14].

Thus, culture takes a pivotal role in the success of business families and family business.

But only a conscious culture empowers a social system through group agency to manage social system change, evolution and success. Non-conscious cultures may create mindsets that lead to turbulent revolutions and social frictions at the expense of the social system in terms of evolutionary success.

To manage culture, to make and keep it useful in terms of social utility, it is paramount to become aware of what culture has been created by the process described above and to check, if the prevalent culture and the mindsets that have been shaped still provide the social system with sufficient social utility. After all, we can only manage what we are aware of, what we are not aware of, tends to manage us[15]. If the culture does not deliver the optimal level of social utility, orderly change can be initiated to maximize the benefits and to minimize frictions and avoid turbulences which can tip the system into chaos. In the interest of all stakeholders, this is not an option – it’s a must to create and preserve socio-emotional and financial wealth of the family and thus, the wider society for all current and future generations to come.

We have established that consciousness and culture are emergent properties, how they are impacting our social behaviour on a conscious as well as unconscious level with various degrees of social utility and that they are malleable. Next, we want to highlight what conscious culture means in a family business context and how it can be analyzed and changed in practice.

Consciousness in business families

Business is an essential part of business families, so doing family business consciously is an essential aspect of living consciously. In order to do family business consciously, we need to be aware the family dynamics and business world.

A conscious business family promotes meaning for all its family members. They are also asked to think of their relatives as human beings. As human beings we all are different, we look at the inner and outer world with different lenses due to the way we look at the world around us is conditioned by our beliefs and mental models. On the other hand, a conscious business family requires for its family members to understand their business.

A conscious business family fosters engagement and happiness in individuals, respect and solidarity in all stakeholders, and mission accomplishment in the business.

While most of business families recognize that family-owned businesses need family members with a high level of technical knowledge in order to succeed in this disruption times, we do believe it is even more important to have family members with a high level of consciousness.

Without conscious family members, family-owned business cannot get lasting success. How many business families have lost their wealth? How many family-owned business have gone out of the business because the lack of shared long term vision? How many business families have broken because a lack of authentic communication based on values?

Conscious family members are business family´s most important asset for long-term success.

A conscious business family consider 3 dimensions: the impersonal, task, or “It”; the interpersonal, relationship, or “We”; and the personal, self, or “I.

Over the long term, the It, We, and I aspects of this system must operate in concert. Although it is possible to achieve good financial results in the short term with unhappy family members, cold relationships, or wasteful processes, the gains will not endure. Strong profits will not be sustainable without equally strong interpersonal solidarity and personal well-being.

But, how do we become a conscious business family?

“The best way to do is to be,” said Lao Tzu nearly 2,500 years ago.

Attention is normally drawn to preserve the financial capital (the having) and business families tends to be focused on the DO level (what families do: Governance –or control of financial capital, Taxation –issues that might diminish financial capital) and the process necessary to achieve those results. Our experience shows that families are even less aware of the infrastructure (the being) that underlies processes and provides the necessary capability to preserve the family wealth from a holistic standpoint (financial capital and non-financial capital: human capital, social capital, and cultural capital) and get lasting success.

Conscious business families require conscious family leaders.

 

Consciousness in family leaders

Conscious family leaders take responsibility for their lives. They don’t compromise human values for material success. They speak their truth and listen to others’ truths with honesty and respect. They look for creative solutions to disagreements and honor their commitments impeccably. They are in touch with their emotions and express them productively. They are able to:

• Demonstrate: Practice setting the example of 7 key qualities: Unconditional responsibility, essential integrity, ontological humility, authentic communication, constructive negotiation, impeccable coordination, and emotional mastery.
• Demand: Once you are able to demonstrate and walk the talk, you earn the right to demand others the same behaviors.
• Deliver: Uphold the standards holding family members accountable showing that you are serious: regularly acknowledging good examples and discussing breakdowns.
• Disseminate: Empower more family members to be the carrier of the way our business family does things over here: Our culture.

Culture in business families

Let’s agree on this, to start with: culture is too important to leave to chance. It will either help or hinder the family’s ability to execute strategic objectives, preserve their wealth and retain family bonds. A shared culture will inspire the engagement of family members – which is why it is a leader’s primary role to develop and maintain it.

Everybody knows it exists, and everybody knows it matters to family-owned businesses. But there’s little consensus on what conscious culture actually is. Let alone how it influences family dynamics, or how it can help achieve lasting success.

Conscious culture

Conscious culture is a mentally owned social construct made of semantic markers of shared beliefs (what is true); shared values (what is important); and shared norms (what is right) that are strong enough in terms of neuronal signal strength to permanently reach the neuronal threshold for consciousness in all members of the social system. The advantage of conscious culture is that members know what they are doing and can change their culture if circumstances require.

Culture, orients family members and shows them how things get done in their organization; what expectations they need to fulfil to fit in; and what they can expect – or indeed demand— from others. The culture is conscious to because it is explicit and collectively agreed.

Like a magnetic field that invisibly forms iron filings into infinitely intricate designs, conscious culture can align human thought and behaviour into productive patterns. The energy of this cultural field comes from our deepest needs and aspirations: to survive, to belong, to achieve, to grow and to find meaning in our lives. We can only satisfy these needs in a community, and there’s no community without culture.

As expressed above, culture is in part comprised of norms. Norms are shared standards derived from a family’s values. Norms help family members interpret and evaluate events and set expectations about appropriate behaviours in response to these events.

Norms represent expressions of a family’s core beliefs, such as how to prioritize objectives and treat one another.

Norms influence how family members see themselves, one another, the family as a whole, the business, and the world in which the business functions. They define how they approach decisions, and solve problems.

Norms are powerful. They ensure conformity. Not by formal sanctions as rules do, but by praising compliant behaviours and faulting deviant ones. Research shows that norms shape behaviour even more powerfully than financial rewards.

We humans are, after all, social animals who want to fit in. Conversely, social rejection causes cognitive dissonance and even stress, all those mental states we humans are eager to avoid. We care about other’s expectations. We are willing to adjust our behaviour to assimilate, knowing that we risk ostracism if we don’t. That’s a powerful incentive to comply.

There are three ways in which a conscious culture can support business lasting success and the family bond:

1. It uplifts family members’ spirits, appealing to their sense of purpose and value.

It quenches our thirst for meaning, eliciting an internal commitment to pursue a noble ambition. This alone unleashes tremendous energy towards the accomplishment of the business family goal. For example, in a manufacturing plant of a big textile family-owned business producing fire-retardant fibres, they are justifiably proud of their contribution to saving lives. It’s not just about the fibres: it’s a matter of life and death. The appeal of such a message to current and future members is clear.

2. It shapes how family members respond to ever-changing, unique circumstances.

It guides their actions without constraining their autonomy—as formal rules or micromanagement practices might do. For example, at a family-owned business we work with, we hold that ‘family members come first’, that ‘relationships matter’; that we must ‘manage compassionately’ while ‘demanding excellence’; and that our difference must be resolved in ‘open, honest and constructive’ ways.

3. It aligns family members’ efforts, orienting them towards a shared goal.

The immediate result is that the family mission remedies the bane of resource allocation trade-offs – a huge benefit to any business, family-owned or otherwise. One of those we work with, for example, has agreed to negotiate conflict through this cultural prism: what will best allow us to ‘preserve family wealth, keep the family bond and deliver value for all stakeholders’.

Which sounds like a goal we can all agree on. And perhaps we can agree on this, too: that conscious culture is a tremendous asset in achieving such a goal. And that as we have shown here, it need not be mysterious and is accessible to all family-owned businesses.

 

Summary

We described how the brain generates consciousness which emerges from other-than-conscious processes which are in constant dialogue with conscious states.

Culture is a social construct that like consciousness itself, is an emergent property arising from dynamic social processes. But the conscious awareness of culture often is fragmented in our conscious awareness with implicit and explicit parts. Implicit parts can be brought into conscious awareness and thus, changed.

We highlighted the importance of culture in a business family context and what tremendous impact it has for the success of mutigenerational wealth creation and preservation expressed in socio-emotional and financial terms. By the same token, culture can contribute to the demise of business families if it is unconscious, inhibiting system evolution and risking turbulent changes that result into chaos.

Culture can be a real catalyst for success and at the same time – a recipe for disaster. So, it’s better be consciously aware of the culture you have created and to be able to change it in the interest of socio-emotional and financial wealth preservation. This is essential for the legacy of the business family, specifically for all current family members (typically 3 generations) and for all future generations. But culture only prevails when it changes. For that, it must be conscious.

 

[1] The Systems View of Life, Fritjof Capra, Pier Luigi Luisi, Oxford University Press

[2] Conscious Business, Fred Kofman

[3] Brain-Mind, Paul Thagard, Oxford

[4] Brain-Mind, Paul Thagard, Oxford

[5] Brain-Mind, Paul Thagard, Oxford

[6] Brain-Mind, Paul Thagard, Oxford

[7] Compare https://en.wikipedia.org/wiki/Niklas_Luhmann

[8] Brain-Mind, Paul Thagard, Oxford

[9] https://en.wikipedia.org/wiki/Paul_Watzlawick

[10] Illusions of Human Thinking, Gabriel Vacariu, Springer

[11] Embracing Complexity, Jean G. Boulton, Oxford

[12]More on the discussion on mindsets: https://en.wikipedia.org/wiki/Carol_Dweck

[13] https://en.wikipedia.org/wiki/Peter_Drucker

[14] https://www.conference-board.org

[15] Coaching for Performance, 5^th edition, Sir John Whitmore, Nicholas Brealey Publishing

ⁱDisclaimer: While we have made every attempt to ensure that the information contained in this concept paper has been obtained from reliable sources, Family Hippocampus is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Family Hippocampus, its related partnerships or corporations, or the partners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this in this concept paper or for any consequential, special or similar damages, even if advised of the possibility of such damages.

Table of Contents[i] Abstract 2 Neuroscience of conflict. 2 Different meaning matrices give rise to conflict. 6 Self-Conflict. 11 Memory and conflict 12 Mindsets. 14 The different mindsets. 14 Fixed Mindset: 14 Soldier Mindset 14 Growth Mindset: 14 Scout Mindset 15 Responding to conflict 16      

Abstract

When two people agree, their brains exhibit a calm synchronicity of activity focused on sensory areas of the brain. When they disagree, however, many other regions of the brain involved in higher cognitive functions become mobilized as each individual combat the other’s argument[1] “Our entire brain is a social processing network however, it just takes a lot more brain real estate to disagree than to agree” (Joe Hirsch, Professor of Psychiatry and Professor of Comparative Medicine and Neuroscience) Conflict is an integral part of our lives and according to the above said, expensive to process in metabolic terms. Understanding conflict dynamics helps us to prevent conflict or find conflict resolutions with less metabolic effort. In this concept paper, we look at the anatomy of conflict using insights from neuroscience and complex system theory.

Neuroscience of conflict

We engage in social processes, i.e., we interact with other agents. The response it engenders will be perceived as affirming or as a threat, based on affective pre-appraisal and with some delay, cognitive appraisal. Social conflict is a result of frustrated expectations. We constantly scan our social and physical environment and make predictions (unconsciously as well as consciously) about what is happening next. These are mostly neural processes outside of our conscious awareness that involve deep limbic brain structures such as the cerebellum. It informs cortical brain regions about potential outcomes of the other’s intention and forms a projected understanding as to the meaning of the others’ person action. Thus, it is involved in risk taking[2], it serves as a predictor, as an anticipator of sensory/motory feed-back allowing us to unconsciously generate fast, and automatic behaviors based on past experiences. This is influencing the way neural maps of self-systems (e.g., identity) are selected to be expressed. The cerebellum holds unconscious beliefs that are used for meaning-making and thus, biases perceptions, affects, cognitions and it encourages intuition[3]. The pre-and post-event evaluation of the predicted event involves the amygdala. This sub-cortical region is activated when we perceive situations as threatening, these result in stress responses such as flight, fight or freeze reactions and elicit noradrenaline and cortisol production. Anticipated positive outcomes (affirmation) involve ventral striatum, which is activated when we expect a reward, and it elicits dopamine secretion which makes us feel good and happy. Predictions about meaning patterns of others are made by on inferences based on neurally calculated probability functions that are derived from various, multidimensional input vectors that are active on the conscious continuum. Predicted outcomes include anticipations about what the predicted outcome means with reference to the needs of an individual in terms of physiological and psychological safety respectively the identity – the mighty SELF. SELF is a robust, neural structure with high valence in relation to the survival imperative, it is a stable reference point and associated with biological autonomy. The organism recognizes that actions have the ‘self’ as origin, and through such actions the ‘self’ exerts agency on the environment. It is the core-consciousness of immediate subjective experience which is un-extended in time which is grounded in affect. Another component of self is the narrative self which implies the power of language. It is a more or less coherent self-image constituted with past and future in various stories told by the ‘self’ and others[4]. Either way, the self is not easily relinquished. The SELF is basically a self-concept i.e., the way we perceive ourselves, our knowledge about our personal qualities and self-esteem, how we evaluate and feel about ourselves. These are emergent properties that change with experiential information and context that morph into a relatively stable structure of the self. Depending on context, roles, activities, and relationships, we shift between different self-concepts to exhibit self-aspects, that are summaries of a person’s beliefs about the self in specific domains, roles, or activities that are structured in various self-schemes. It all belongs to a core self-concept that is coherent and meaningful for the individual[5]. The personal self relates to one’s own personality and experiences, but it is not an isolated phenomenon as social processes are defining in the emergency and conduct of self and it becomes a social self and identity. It is determined by our relationships with others in various groups, culture and via shared traditions that bind groups together. The neural assembly that is activated in social processes when comes to forming self-referential thoughts and thoughts about others is the medial prefrontal cortex[6]. The emotional self is primarily processed in sub-cortical regions. Information is processed with reference to the cognitive self and emotional evaluation. As mentioned above, the self is something we construct from the interpretation of internal and external stimuli we receive and feedback we get from our social environment. People learn about and evaluate their personal qualities by comparing themselves to others (social comparison theory). Judgements are influenced by the state of being the individual is in, socially accepted benchmarks and standards (assimilation effect), which are prevalent in cultural and social norms. The forming of the self-structure is a recursive process of the individual and social environment. It is a dynamic complex system that learns through try and error – through conflict and conflict resolution. Our identity is a neural, stable structure that needs to balance stability and plasticity. Conflict arises because of perturbation of the self-system. Major perturbations may lead to dynamics that exceed the adaption capacity and the system collapses into an unresourceful state. A social process can also be described as a dynamic complex system. Interpersonal activities are communication processes. One party sends information originating from her mental model of the world with intention. The other party only receives stimuli that the brain transforms into meaning based on context and the subjective meaning matrices referring to the identity and associated needs. Communication is a permanent process because we cannot not communicate (Paul Watzlawick[7]). Albert Mehrabian[8] postulates that in 93% of the cases we communicate outside of the linguistic realm, which leaves only 7% for the spoken word. But what triggers such perturbations in a social process? Agents which have similar histories or even share histories will generate similar domains of meaning while those which trace very different histories with little or no sharing may generate unique domains of meaning[9]. Predictions in social processes are based on interpersonal communication and the meaning of it. Meaning is the way we evaluate communication and can be interpreted as the currency in interpersonal transactions. Naturally, predictions may be correct or incorrect. It is conceivable that prediction error is less likely when agents have a shared history of interactions. That leads to a consensus domain versus agents who may have a shared history of interaction but feature different meaning domains. The neural assembly driving error detection is the anterior cingulate cortex (ACC). This brain structure separates the limbic brain from the prefrontal cortex and mediates between the two macro-brain structures. The ACC detects errors on a cognitive and affective level[10], passes the information on for further affective processing and can elicit an error correction process projecting to the cognitive control network, to which the prefrontal cortex is central. Information that is inconsistent with the self-concept respectively the various self-aspects and schemes can be perceived as a threat to the self which activates the amygdala that triggers stress responses such as fight, flight or freeze reaction. However, stress responses inhibit the activity of the prefrontal cortex. Still, the error must be dealt with and the most active brain structure in stress responses is the amygdala, leading to even more irrational behavior. Negative prediction errors trigger the amygdala. A moderate stress response conjures up energy, required to deal with the problem and correct to reduce the prediction error, either by reframing or convincing the conflicting party to adjust behavior. Extreme levels of stress lead to a reallocation of energy by shutting down parts of the brain that are not crucial for survival, and the highest energy consumer in the brain is the prefrontal cortex. In this situation we are ‘running’ for (psychological) safety (flight reaction), exhibit default behaviors and increase the intensity of behavioral biases. We may even launch aggressive attacks in our defense (fight reaction) or fall silent altogether (freeze reaction). These responses are outside of our conscious awareness and control if we do not become aware of the situation. We simply fail to integrate novelty, thus pleading and arguments of the conflict partner simply won’t be perceived and processed. The emotional evaluation of prediction errors is asymmetric. A positive prediction error elicits the reward system and, for argument sake, provides us with 1 unit of utility. A negative prediction error triggers the amygdala which results in stress responses. The derived disutility units are 2! A negative prediction error, i.e., a frustrated expectation is twice as powerful as a positive surprise. The brain is not built for accuracy but to help us to survive. Hence, we rather err on the wrong side that leads to the negativity bias, a systematic behavioral bias that is well established. Expecting the worst and hoping for the better can still lead to negative prediction errors. Conflict arises because mental models and associated meaning matrices and meaning patterns don’t map onto one another resulting in (un)reflected prediction errors in combination with the unwillingness, respectively the inability, of two or more parties to cooperate in order to adjust behaviors.

Different meaning matrices give rise to conflict

Our brains are self-organizing systems of neurons that form patterns of relationships depending on sensory input derived from our 5 senses (Hebbian learning). Our eyes, ears, skin, nose and pallet are stimulated by the environment and the brain makes meaning of the input with reference to physiological needs, such as food, shelter, reproduction and psychological safety including social needs like belonging to a group. Experiences that shape our brain, are happening on a spatiotemporal scale. Pre-cognitive experiences feed the subconscious with information just like conscious experiences that are not compatible with our version of self, e.g., in the relationship with the caregiver. Even pre-natal influences are shaping the brain. Transgenerational epigenetics show that embodied experiences from previous generations are influencing later generations. Elevated and prolonged stress levels of mothers lead to higher susceptibility to stress in offspring. Experience from relationships with our caregiver and parenting styles as well as the immediate social environment including family and friends (especially peers during adolescence) are constantly shaping and re-shaping the brain in addition to formal and informal education within a framework of social and cultural norms. The experiential shaping of the brain is a recursive process of perceived stimuli and actions with multidimensional feed-back-loops. These build a mental model of the world, a neural map of meaning matrices that defines how we perceive the world and how we respond to it. Consequently, each individual creates intentional space in time based on the subjective mental model of the world and permanently generates predictions about the social and physical environment. Too many prediction errors can lead to anxiety and depression in extreme cases, as they erode identity and self-esteem. Less severe manifestations include self-validation strategies like demonstrated in the confirmation bias, the systematic preference for information that confirms the mental model of the world and meaning matrices and the rejection of contradicting evidence. It is important for us to reduce uncertainty in navigating the world and it reduces cognitive dissonance. A social process may trigger associated affective states that are re-experienced and create dissonance. These transferences, where we project the experience onto persons that are not responsible for that experience are also serving the goal to reduce cognitive dissonance, often at the expense of the quality of relationship with the other person. Reality is a biased, mental construct driven by individual brain structures. Thus, there is not one reality, but many subjective realities created by our individual brains. Individual realities are informed by basic physiological needs (survival and procreation) and physiological needs which are social at the core. What is meaningful is not stored as a representation in our memories. It is still in the dynamic maintenance of physical, psychological and social viability[11]. Meaning is embodied by the overall state of the individual in the perceived context. In general, tension emerges, when two or agents cannot reach the sense of shared viability, i.e., when they fail to create a shared viability set. The viability set maps onto our basic needs and the associated neurological levels. Abraham Maslow[12] has summarized the priority and connection of basic needs in the ‘Hierarchy of Needs’: Perceptions and re-perceptions of stimuli are evaluated with reference to basic needs. During our development phases, especially during our formative years but also later in life, we develop values and belief-systems inspired by our immediate social environment and cultural influences, such as social norms, in conjunction with our identity. These define how we perceive things and act on them. As with basic needs, we can observe a hierarchy of influences on out behaviors, laid out in the Neurological Levels[13], a hierarchy developed by the NLP specialist Robert Dilts. The hierarchy of neurological levels is defined by the degree of influence β and depends on the direction of travel. From top to bottom: β < 1 , indicating dominance and from bottom to top: β < 1 indicating a weaker influence. The mission or purpose drives our identity formation that we defend to keep it integrated because it helps us reducing uncertainties in navigating the world – a prerequisite to maintain physical homeostasis and to perform social functions. Who we think we are defines our beliefs and values! Values are essential for social functioning, serving the basis for love and belonging. This is essential because to survive we are safer in the group and are stronger when we cooperate. What we believe is pivotal to what skills and capabilities we can acquire. Values give us direction and help us to evaluate events. What we believe we can and can’t do defines our behavior, which impacts our social environment. In turn, the social environment influences all levels above. Meaning happens on the mission and purpose level and is thus, very powerful given the position in the hierarchy. Stimuli arising from social processes are, like all other stimuli, assigned meaning with reference to neurological levels and levels of basic needs by association. The result is a matrix of meaning which defines a meaning vector. A social process is defined by 2 or more individuals that are in interpersonal exchange, i.e., 2 different meaning matrices producing meaning vectors pointing in different directions. That is, meaning matrices are not mapping onto one another. This situation gives raise to misunderstandings and conflicts. For instance, conflicts arise because of differences of neurological levels: different purpose, needs and interests, cerate different meaning matrices with incongruent meaning vector orientation. The successor needs to create self-esteem and for self-actualization, hence they pursue interests which are incompatible with what the predecessor deems to be in line with his or her values from which the need derives that the successor takes over and the interest in him or her to comply. The career outside the family business is important to the successor while it is important to the predecessor that the offspring takes over. The predecessor thinks, this means the offspring ignores the hard work and effort he put into creating the wealth and perceives the decision of the predecessor as a threat to his or identity. To keep the identity integrated (again key to survival given its hierarchical order) the predecessor exhibits defense strategies to protect his identity which includes all well-known stress responses like fight (attack the predecessor), flight (stonewalling and hiding behind the position) or freeze (withdraw). The successor does to mean to hurt or disrespect the predecessor but means to pursue his passion. Naturally, they feel treated unfairly and disrespected, threatening their identity. These dynamics elicit similar stress responses in the successor and a conflict is born because of different meaning matrices and meaning vectors with different directions. Unless there is a mutual understanding and congruency in meaning matrices and meaning vectors, this conflict deepens and becomes embodied. The neural pathways are forming based on the conflict and deepen over time. The brain structures become rigid, thus neither side is able to change their mind quickly. Differences in mental models of the worlds make prediction errors more likely as they create differences in meaning maps. In conjunction with naïve realism which happens on an identity level, i.e., a situation where one part in a social process fails to accept different mental models of the world, conflict can arise simply because the same stimulus is interpreted differently and cannot be agreed on. Both do not have a shared reality, which after all is a social construct. As they have difficulties to reach an agreement of what reality is, they are likely to run into conflict. Stress responses on both sides exacerbate the problem as both parties exhibit self-protection biases and become unable to reflect and integrate the others person mental model of the world and associated meaning matrix into their own.

Self-Conflict

The above said implies that within one individual, there is no room for conflict because of integrated meaning matrices. But that’s a fallacy. The individual is an open system constantly interacting with the environment. In turn, the environment is influencing the individual. The interaction is characterized by dynamic feed-forward loops (based on predictions and expectations) and feed-back-loops, signaling predictions errors. Our neural processes comprise moral emotions and social cognitions. Moral emotions include shame and embarrassment which can lead to behavioral adjustment or anxiety and depression. Moral dilemmas are inner conflict situations where the individual is forced to decide between killing one person to safe five others (utilitarian approach) or not to kill one person to save five others, based on the social norm that you shall not kill (deontological approach). The individual processes the request in reference to the individual mental model of the world and related meaning matrices. In a business family context, moral dilemma situations are often observed in succession scenarios where specifically successors decide based on conflicting narratives whether to take over the reins and if this was what they actually wanted to do with their lives. Social emotions include sympathy, empathy and compassion with someone else, as well as hate and contempt. Both are well-known self-validation strategies. When the individual meaning matrices are out of sync i.e., when stimuli are controversial in contextual and emotional meaning it leads to dissociative states, neural disintegration and intrapsychic conflicts – the harbinger of social conflict! Intrapsychic conflicts manifest through transferences. They are attribution errors that arise from inner psychic states interpreted as external parts of other persons[14]. They are projections of inner conflicts to others that are inherently not responsible for the underlying cognitive and affective neural patterns. These are inner states that are disowned because they are in conflict with the current cognitive scheme and may lead to dissociation and ‘depersonalization’ of certain perceptions. The result can be a dissociative identity disorder. Consequently, the meaning vectors in a social process are incongruent which gives raise o conflict.

Memory and conflict

The database for calculating probabilities for our predictions is our memory. There are seven types of memory that pursue different functions. The procedural memory stores habits and routines and responds very quickly to stimuli, often outside of our conscious awareness. These habituated behavioral patterns are hard to change and can even reach the level of addiction. The declarative memory includes the long-term memory which includes autobiographical events and meaning from past experiences. Self-relevant and emotionally charged experiences are given priority in memory processing, forming deeper engrams in the brain than experiences that are deemed less relevant and have no emotional content. Encoding memories, respectively retrieving memories is not a precise process. The process is rather highly context dependent and driven by conscious and subconscious intentions. Incoming information is biased by the mental model of the world and the existing meaning-making matrix. The memory section of our brain is not a filing cabinet. Thus, memory is subjective. Different people recall the same event in unique ways, and people exaggerate the difference between similar events in their own life. It helps the brain distinguish between similar things and prevent confusion[15] but it may also to create confusion in memory recall in a conflict situation. The retrieval of memories is a process of reconstruction, prone to biases influenced by the current situation (re-perception error). After the memory has been sufficiently used, it is re-encoded and re-stored – again a process prone to biases and distortions. Memories are neural representations in the form of synaptic connections that form neural pathways (brain engrams created through long-term potentiation). Memory not reinforced by retrieval and re-encoding will get weaker and eventually lost. Experiments with mice have shown that 20% of the synapses are being replaced each day. If the memory is not rewired in that process, it is lost – making room for new memories. Forgetting is in the interest of survival as it is essential to learn to unlearn and forget – making room for new information. This mechanism ensures brain efficiency as we accumulate new information conducive to survival. This is further substantiated by a recent research[16]: A study of spatial learning in mice shows that exposure to new experiences dampens established representations in the brain’s hippocampus and prefrontal cortex, allowing the mice to learn new navigation strategies. The researchers showed that exposure to a new experience may serve as an environmental trigger that dampens established hippocampal-prefrontal connectivity, enabling flexible spatial learning In other words, our ability to remember new experiences and learn from them depends on information encoding that is both enduring and flexible. However, in human beings, we know that the subconscious carries plenty of memories outside of our awareness that still drives predictions and decision-making much more than the cognitive part that we are aware of. A recent study shows that we retrieve information from memory; but fail to recognize that we previously learn this particular information in the presence of strong semantic cues. The results demonstrate that recall – long characterized as predominantly reflection-based processing in episodic memory – may be at times served by a confluence of Implicit cognitive processes[17]. This phenomenon may be related to associative interpretation in the perception process of information. For instance, several cues relating to the word ‘hospital’ may be semantically grouped into a mental representation of what we hold as a meaning for the word ‘hospital’, but the actual word is not the learned cue. Consequently, the word ‘hospital’ is constructed and encoded from related cues respectively re-constructed at the retrieval stage within a given context. We can conclude that the human prediction process is error-prone, as we rely on intentionally constructed and re-constructed experiences encoded and stored in our memory as basis for biased predictions to navigate our world. It is worth highlighting that intentionality does not need conscious awareness[18]. Our intentionality is in permanent action but mostly outside of our conscious awareness. Paradoxically, this leads to so called ‘unintended consequences’ which are fertile grounds for interpersonal conflict. The uncertainty in memory encoding and retrieval is conducive to creating intra- and interpersonal conflicts and can make it difficult to mitigate and manage different types of conflicts. The conflicting parties may have been exposed to the same cues but have very different associations and memories of them. Thus, the imprecision of our memories exacerbates conflict potentials and the difficulties of navigating conflict.

Mindsets

Mindsets are sub-systems of the belief-system which maps onto meaning matrices and are pivotal input factors for meaning vectors. Conflicts are more likely to ensue when incompatible mindsets meet in a social process. But even compatible mindsets can be conflict prone. A coercive power mindset is compatible with an accommodating mindset. But when the accommodating mindset merely suppresses basic needs such as respect and self-esteem (identity) and just accommodates prediction errors, it may lead to indirect conflicts that remain only temporarily under the surface. It is like sitting on a ball in the sea which is being constantly inflated. It will remain under the water for quite some time but will eventually overpower you and pop up.

The different mindsets

We are not always completely in one mindset but exhibit general preferences for one or the other and may even be able to shift according to the situation, depending on our own flexibility and mindset.

Fixed Mindset:

The belief is that learning new things that haven’t been learned so far is not possible. Change is a challenge as it involves novelty. This is conducive to the most expensive words in business history: ‘We have always done it this way we have never done it that way!’ It calls for adoption of behaviors.

Soldier Mindset

The belief is that to achieve it is important to fight, what has been achieved must be defended. Contradictions to the mental of the world and associated meaning matrices indicate change and novelty. This is perceived as a threat to what has been achieved and can only be protected by defense policies such as fighting or building stonewalls where the soldier can hide in an illusion of safety (flight reaction), or to do nothing and ignore (freeze reaction).

Growth Mindset:

The belief is that learning is possible and necessary. Change by accommodating novelty is perceived to be normal and welcome in the spirit of evolution. Traditional ways of doing things served their purpose back in time but must be adapted to the current situation.

Scout Mindset

The belief is that in order to survive, it is essential to scout for new ideas, to adapt and even revolutionize in the name of evolution. Novelty that contradicts the current mental model of the world and the associated meaning matrix are intriguing, they are welcomed stimuli that excite the scout mind and challenges it in a positive way. These mindsets are forming ‘belief-bubbles’, belief subsystems that provide the illusion of safety. Without social intelligence, i.e., social cognitions such as the Theory of Mind (ToM) which allows for taking the perspective from the vantage point of the other belief-bubble and social emotions such as empathy, different belief-bubbles in social processes are conducive to conflict. Someone with a fixed mindset and/or a soldier mindset and someone with a growth and/or scout mindset is prone to conflict in absence of both parties reflecting upon their mindsets, which is a form of cooperative behavior. This situation is often observable in multigenerational wealth transitions of business families where the preceding generation is in conflict with the current and/or next generation. These conflict situations are counterproductive and can even destroy what the family has worked on in previous generations and decades. The conflict experience is embodied as it forms neural representation by changing the structure of the brain. The longer a conflict lingers on, the deeper the engrams in the brain which can be partly passed onto the next generation through the mechanics of transgenerational epigenetics modifications. When conflicts are not solved in the present time, they become transgenerational issues that are uncontrollable and perturb the family system permanently.

Responding to conflict

Mindsets also play a role in how we respond to conflict, as alluded to in the previous section. Thomas & Killman’s ‘Conflict mode analysis’ (1974) identifies five styles used in managing conflict. Avoiding the conflict situation in conjunction with a low propensity to cooperate goes as far as denying that a conflict exists. The belief is that nothing will work accompanied by feeling helpless can morph a family member into a victim role if the conflict is significant enough. Victims are at the lowest end of the narcissist scale who often feel a sense of entitlement which can backfire dramatically and negatively impact the entire social system. The other extreme, which is dangerously compatible with the avoidance and accommodation preference, is competition. One party is highly assertive with a low propensity to cooperate, their wants and needs of the ‘self ‘take precedence over the wants and needs of others, driven by pluralistic ignorance. This is often the case with narcissistic disorders high up on the narcissist scale with a strong sense of entitlement. Accommodating is a strategy with an emphasis on the relationship and low assertion level of the fear of social rejection, which again involves the amygdala. Sacrifices are made to preserve and rescue the relationship. The typical rescuer risks becoming a victim eventually. Upon reflection on the conflict resolution, they may feel taken advantage of and unfairly treated. They may even judge themselves not to have taken responsibility and accountability in voicing their concerns, and now they feel run over, disrespected and ignored. Compromising is a result of negotiation and trade-offs, finding a middle ground and splitting the difference. The question begs how sustainable the resolution is. The agreement may lack commitment from both sides, and it is ultimately a power struggle with limited exploration of alternative solutions. Even though the aim is to create a win-win situation, it often results in a perceived win-lose situation, creating tensions between the parties in other realms, especially on the needs level, as discussed above. So far, all conflict response strategies are conducive to creating internal conflicts in at least one of the opponents. The solution is the collaborative approach in which both parties are willing to fully assess and recognize their own concerns and needs, whilst reciprocating this also for the other party. A comprehensive exploration of the issues at hand is jointly conducted, novelties are mentally integrated, and solutions rather than the problem are discussed. This can offer sustainable satisfaction to both parties and give rise to a true win-win situation. The collaborative approach requires personality traits that allow for high emotional and social intelligence to create and maintain psychological safety during the process. It’s is a tall order for people in conflict, as the amygdala will inevitably inhibit cognitive functions that a collaborative conflict resolution would require. In this case, mediators can facilitate a collaborative conflict resolution while preserving or even enhancing the relationship between the conflicting parties.   [1] https://neurosciencenews.com/disagreeing-brain-17575/ [2] https://neurosciencenews.com/brain-risky-behavior-17633/ [3] Compare ‘The Neuropsychology of the Unconscious’, Effrat Ginot, Norton [4] Compare: Social Norms from the Perspective of Embodied Cognition, Chris Goldspink in the Complexity of Social Norms, Springer [5] Social Psychology, Eliot R. Smith et. al., Psychology Press [6] The Student’s Guide to Social Neuroscience, Jamie Ward, Routledge [7] https://en.wikipedia.org/wiki/Paul_Watzlawick [8] https://www.bl.uk/people/albert-mehrabian# [9] Social Norms from the Perspective of Embodied Cognition, Chris Goldspink in the Complexity of Social Norms, Springer [10] The Student’s Guide to Cognitive Neuroscience, Jamie Ward, Routledge [11] Compare: Social Norms from the Perspective of Embodied Cognition, Chris Goldspink in the Complexity of Social Norms, Springer [12] https://simple.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs [13] https://www.kessels-smit.com/files/logicallevels_handout_Engli.pdf [14] The Brain an Conscious Unity, Freud’s Omega, Petr Bob, Springer [15] https://neurosciencenews.com/distorting-memories-helps-the-brain-remember/ [16] https://neurosciencenews.com/experience-memory-learning-17871/ [17] https://neurosciencenews.com/memory-recall-semantic-cues-17758/ [18] The Neuropsychology of the Unconscious, Efrat Ginot, Norton   ⁱDisclaimer: While we have made every attempt to ensure that the information contained in this concept paper has been obtained from reliable sources, Family Hippocampus is not responsible for any errors or omissions, or for the results obtained from the use of this information. 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