The Business Case for Reading Novels

This piece originally appeared in The Harvard Business Review.

I thought it was worth reposting during the summer holidays when novel reading beckons. I've been a devoted, even fanatical reader of fiction my whole life, but sometimes I feel like I'm wasting time if I spend an evening immersed in Lee Child's newest thriller, or re-reading The Great Gatsby. Shouldn't I be plowing through my in-box? Or getting the hang of some new productivity app? Or catching up on my back issues of The Economist? That slight feeling of self-indulgence that haunts me when I'm reading fake stories about fake people is what made me so grateful to stumble on a piece in Scientific American Mind by cognitive psychologist Keith Oatley extolling the practical benefits to be derived particularly from consuming fiction.

Over the past decade, academic researchers such as Oatley and Raymond Mar from York University have gathered data indicating that fiction-reading activates neuronal pathways in the brain that measurably help the reader better understand real human emotion — improving his or her overall social skillfulness. For instance, in fMRI studies of people reading fiction, neuroscientists detect activity in the pre-frontal cortex — a part of the brain involved with setting goals — when the participants read about characters setting a new goal. It turns out that when Henry James, more than a century ago, defended the value of fiction by saying that "a novel is a direct impression of life," he was more right than he knew.

In one of Oatley and Mar's studies in 2006, 94 subjects were asked to guess the emotional state of a person from a photograph of their eyes. "The more fiction people [had] read," they discovered, "the better they were at perceiving emotion in the eyes, and...correctly interpreting social cues." In 2009, wondering, as Oatley put it, if "devouring novels might be a result, not a cause, of having a strong theory of mind," they expanded the scope of their research, testing 252 adults on the "Big Five" personality traits — extraversion, emotional stability, openness to experience, agreeableness and conscientiousness — and correlated those results with how much time the subjects generally spent reading fiction. Once again, they discovered "a significant relation between the amount of fiction people read and their empathic and theory-of-mind abilities" allowing them to conclude that it was reading fiction that improved the subjects' social skills, not that those with already high interpersonal skills tended to read more.

Theory of mind, the ability to interpret and respond to those different from us — colleagues, employees, bosses, customers and clients — is plainly critical to success, particularly in a globalized economy. The imperative to try to understand others' points of view — to be empathetic — is essential in any collaborative enterprise.

Emotions also have an impact on the bottom line. A 1996 study published in the journal Training and Development assessing the value of training workers at a manufacturing plant in emotional management skills — teaching employees to focus on how their work affects others rather than simply on getting the job done — found that union grievance filings were reduced by two-thirds while productivity increased substantially. And a study of a Fortune 400 health insurance company conducted by Peter Salovey, a psychology professor at Yale, looked at the correlations between emotional intelligence and salary and found that people rated highest by their peers in emotional intelligence received the biggest raises and were promoted most frequently.

To bring the subject home, think about how many different people you interact with during the course of a given day — coworkers, clients, passing strangers, store clerks. Then think about how much effort you devoted to thinking about their emotional state or the emotional quality of your interaction. It's when we read fiction that we have the time and opportunity to think deeply about the feelings of others, really imagining the shape and flavor of alternate worlds of experience. Right now, I'm in the middle of Irene Nemirovsky's posthumously published novel about France's fall to the Nazis in 1940. Her simple sentences sketch a sense of uncertainty, moral ambiguity, and heartbreak — feelings I certainly wouldn't want to dwell on in "real" life, but emotions I'm better off for having taken the time to consider.

But nourishing empathy doesn't require such grimness. And if you want your diet of fiction, as it's shaping your mind to be more emotionally acute, to be specifically relevant to work, there is a body of great literature about business and organizational behavior. For instance, Anthony Trollope's The Way We Live Now, inspired by 19th century financial scandals among the British elite, resonates powerfully today. In his autobiography, Trollope wrote that "a certain class of dishonesty, dishonesty magnificent in its proportions, and climbing into high places, has become at the same time so rampant and so splendid that there seems to be reason for fearing that men and women will be taught to feel that dishonesty, if it can become splendid, will cease to be abominable. If dishonesty can live in a gorgeous palace with pictures on all its walls, and gems in all its cupboards, with marble and ivory in all its corners, and can give Apician dinners, and get into Parliament, and deal in millions, then dishonesty is not disgraceful, and the man dishonest after such a fashion is not a low scoundrel. Instigated, I say, by some such reflections as these, I sat down in my new house to write The Way We Live Now." Seems fairly au courant to me.

From now on, I'm going to feel less like an escapist slacker when I'm engrossed in a new novel. In addition to the Trollope, below are some of my favorite books to get you started.

Kurt Andersen, Turn of the Century — set in 2000 and 2001, a successful TV producer husband and digital entrepreneur wife, trying to balance the demands of work and life, wind up pitted against each other as executives in a U.S. media empire. His mistrust grows when she becomes a favorite of the Rupert Murdoch-like chairman. Meanwhile, their hedge-fund-manager best friend is involved in big-time stock manipulation. (Full disclosure: my husband is the author)

Jane Austen, Sandition — in this unfinished fragment of a novel, Austen departs from her typical marriage plot to describe the zealous entrepreneurialism of a real estate speculator. While we can never know how the novel would have ended, we can be pretty sure his housing bubble will burst.

Charles Dickens, Bleak House — Dickens' tenth novel explores the human cost of prolonged litigation through the eyes of Esther Summerson, who is caught up in a multi-generational dispute over the disposition over an inheritance. Anyone who has ever been entangled in a lawsuit will revel in the characterization of the process. At the time of publication, 1852–1853, public outrage over injustice in the English legal system helped the novel to spark legal reform that culminated in the 1870s.

William Gaddis, JR — in the 1976 National Book Award winner, the 11-year old protagonist, JR, secretly trades penny stocks, using the tools of the trade at the time — money orders and payphones — to build a fortune. Written entirely in dialogue, the absurdity of a precocious child's feat satirizes as Gaddis put it, "the American dream turned inside out." His description of dysfunctional boards and the corrosive effect of corporate takeovers and asset stripping are as current today as they were 30 years ago.

Joseph Heller, Something Happened — Heller's stream of consciousness second novel follows a regular-joe middle manager as he prepares for a promotion. The messy interweaving of his thoughts about his job, family, sex, and childhood perfectly distill how complicated the selves we bring to work really are.

How One CEO Grows Her Business with Feeling

What do you think causes millions of people to miss work and school in developing economies? Illness? Lack of childcare? Minimal professional training? Insufficient infrastructure? While all of those certainly play a role, I'm guessing that what Elizabeth Scharpf stumbled across as a critical factor in absenteeism wasn't on your radar. While interning in Mozambique in 2005 for the one-person (!) private-sector development division of the World Bank — studying how small and medium-sized businesses can play a role in developing economies — Scharpf, now a 34 year-old graduate of Harvard's graduate schools of business and government, happened to overhear a local colleague complaining that her employees often missed work because they were menstruating.

Elizabeth Scharpf

Seriously?

Perplexed and intrigued, Scharpf thought this might represent a business opportunity, and decided to dig deeper.

A study fielded by the Council on Foreign Relations, "Addressing the Special Needs of Girls," underscores why missing school matters in a big, long-term way. The research found that each extra year of secondary education increases a woman's potential earnings by 25% on average. In South Asia and sub-Saharan Africa, another long-term study found that "more equal education between men and women could have led to nearly 1 percent higher annual per capita GDP growth" in each country. Beyond the humiliating difficulties for millions of impoverished individual women trying to improve themselves and support their families, this is a global issue with significant consequences for the economies of developing countries.

Scharpf was passionately determined to find a solution, tackling the problem the way she always does — by talking with people. "And when you talk to people," she says, "you discover what's missing. It's that simple." Those conversations revealed that it was the economy, stupid. A study found that 18% of school age girls in Rwanda, for instance, miss school because menstrual pads are too expensive. In countries like Mozambique and Rwanda, where the per capita GDP is under $1,000, the average annual cost of $33 (12 months x 5 days x 5 pad/day x .11/pad) for the cheapest imported sanitary pad can often be simply unaffordable. Because the "unmentionable" subject of menstruation is taboo, the market failure — supplying cheaper pads — had never received the attention it deserved.

Scharpf found that absorbent wood pulp was the biggest raw material manufacturing expense for pads, and wondered if cheaper indigenous materials could be used for local production, and if also coupled with a more efficient distribution network, there might be a real business opportunity given the huge underserved populations.

Successful Social Entrepreneurship Combines Mind and Heart

Scharpf did all the traditional MBA number-crunching and analyses, but recognized that tapping into emotion — the incredulity, outrage and fellow-feeling aroused in industrialized countries by the discovery that 21st century working women are routinely reduced to sometimes using ineffective rags, or even bark or mud in rural areas, for feminine hygiene — would be essential if a fledging enterprise were to succeed. "I have empathy with these women," she told me, "because I don't think where you are born should be the biggest indicator of your potential for health, wealth and happiness. I want to change that dynamic."

Rwanda was a good place for Scharpf to launch her first initiative because local female entrepreneurs had already established their integral role to the economic renewal of the country in the years since the genocidal 1994 civil war. In 2009, with $60,000 in seed money from the not-for-profit VC organization Echoing Green, and with the Harvard Business School's first social entrepreneur fellowship, Scharpf founded Sustainable Health Enterprises (SHE).

Instead of simply raising charity cash to import finished pads, Scharpf and her organization are inventing a whole new system of community-based education, business training, manufacture and distribution from locally-sourced banana fiber — that is, solving this serious problem and creating a sustainable regional business. SHE has created a franchise model — providing business skill training, technical expertise, and co-investment — to partner with women in Rwanda and other developing-country communities to distribute and ultimately manufacture and launch their own SHE LaunchPads franchises. As product is sold, some of the initial working capital that SHE puts up is paid back, with the entrepreneurs eventually owning their local franchises. In turn, SHE reinvests its profits in new geographies or other disruptive enterprises.

Emotion Creates a Common Language

Scharpf says her challenge in dealing with scientists, academics, businesspeople, community activists and policy wonks "is always, 'How do I speak in the same language to each of these different constituencies each with their unique language and objectives?'"

Scharpf and the SHE team, for example, first identified in banana-plants a local agro-waste fiber, and after experimenting, concluded that it had the potential to be an absorbent, cheap, safe material. They then approached MIT to partner on enhancing the process to make it more absorbent. She didn't initiate the conversations by tugging on the professors' heartstrings, highlighting SHE's efforts to improve girl's and women's lives, but rather by challenging the scientists to help her solve a complicated new chemical engineering problem. But she realizes that it was the practical need to pioneer new materials technology under strict cost constraints in tandem with improving lives that really accelerated the innovation process. "I've found," says Scharpf, "that the common language is the one of emotion."

Emotion Attracts Good People

Scharpf told me she recently ran an ad for SHE's first job opening in New York. "If you read the job description," she said, "beside the intro and stuff about the need to financially analyze the potential to grow a business in x y and z ways, it was very dry stuff, but when we added the emotional elements around that factual description — that we are trying to basically change the paradigm of how international development is done, that we're trying to work with communities to help improve lives, that we want to be disruptors — all those good things — well, the response was overwhelming."

Scharpf has experienced firsthand that what inspires people — a mission to improve lives — is also good for business. This elusive component is something that behavioral economists are beginning to document. As Gretchen Spreitzer and Christine Porath reported in a recent issue of HBR, for organizations to prosper today, their employees need to feel as if they are "engaged in creating the future — the company's and their own." Research is also demonstrating that basing performance purely on beating the competition or making money can actually decrease employees' intrinsic motivations to pursue a goal. In her book Rapt: Attention and the Focused Life, Winifred Gallagher cited a study in which "college students who were paid to do a puzzle were significantly less motivated than those who worked for free."

Emotion Inspires Ongoing Development and Builds Community

Scharpf intends for Rwanda to be just a phase-one proving ground. "We're looking at Costa Rica and India to explore how we can technologically and operationally increase distribution either through new natural fiber based lines and/or by distributing other sorts of products via our network." She was recently contacted by entrepreneurs from Zambia and Zimbabwe who were interested in starting SHE franchises. While doing a typical needs assessment, the first question Scharpf asks is "who is the person and what is driving them" — and then she explores the local raw materials and local business conditions. Scharpf ardently believes that SHE's performance is influenced not only by the through-put of their machines and the efficiency of their distribution network, but by their ability to align people's interests and passions with their roles.

Managing Emotion Effectively Keeps Business On Track

Scharpf says being attuned to the emotional aspect of work keeps her sensitive to issues that otherwise might not be immediately obvious — allowing her to pre-emptively deal with challenges before they grow disruptive. "The biggest challenges I have on a daily basis are with regard to human emotions," she says. "They should have a psychology class at the business school because I am finding I am most effective when I understand what drives people to do what they do, whether it's what they are passionate about, or what makes them feel insecure, or what makes them feel good about themselves, or what makes them have confidence, or what they can be proud of — keeping in mind all of those things."

The bottom line is that empathy without rigorous, rational analysis solves no important problems — but rationality without empathy simply misses plenty of important and soluble problems. To be a responsible human and to be a successful entrepreneur requires both, working in tandem.