In-group and out-group dynamics have been on my mind a lot recently, and not just because they keep surfacing with clients. They show up across organisations - within teams, at Executive level, and in HR cases. They come up everywhere, from social media echo chambers to how world leaders operate.
It’s also led me to revisit Paul Gilbert’s work on how our evolutionary brain processes social relationships. There’s a lot in it that can help us understand how organisations function - and malfunction.
Where We See It
In-group and out-group dynamics appear in all sorts of organisational settings:
Teams with clear favourites
Executives being subtly (or not-so-subtly) pushed out
People fired for being a “poor fit”
Cases of bullying or discrimination
It’s not always so obvious. Sometimes it’s about who gets attention, who gets included in decisions or not, who’s trusted with the tricky stuff, and who isn’t.
Why It Happens
This goes back to our older brain. Long before organisations and job titles existed, humans had to manage threats and compete for limited resources like food and territory. That meant we needed ways to judge social rank quickly: who was stronger, who was safer to challenge, and who we should avoid confronting.
According to Gilbert, this deep wiring affects how we process relationships. We compare ourselves to others constantly, which creates feelings of pride or shame, assertiveness or submission, confidence or anxiety. It’s a social sorting system - and it can take a toll on our wellbeing because this inferior or superior social ranking can set off our threat response.
About two million years ago, though, we evolved newer capacities. Alongside threat and competition, we developed a caring system. Attachment became part of our survival: recognising distress in others, responding to it, helping, being helped. Cooperation, fairness, and group belonging became crucial, not just for individuals, but for whole communities.
This caring drive is powerful. It’s what makes us want to contribute, to help solve problems, to participate and collaborate, to have a sense of purpose. People want to do that for their group, their organisation, as long as they don’t feel taken advantage of. It’s still important for us to monitor give and take, and have a fair exchange. This helps ensure we’re not risking rejection or disadvantage.
Crucially, it’s important to note the role of social systems, which can cultivate intensely destructive behaviours towards outgroup members - or create environments that encourage the opposite. By social system, we may mean an educational system, an economic, political, legal or healthcare system, or communication systems such as media networks or social media. Or a work based organisation. Where in-groups and out-groups compete, the social system has a huge influence on what happens to the out-group.
Why This Matters for Leaders
When the “old brain” dynamics of threat and exclusion are active, people experience real emotional consequences: shame, paranoia, anxiety, a sense of not belonging. The risk of being outgrouped can be so great that people will align themselves with those in power, even if it means compromising their values.
Sometimes this shows up in subtle ways like exec dysfunction, growing mistrust, disengagement. Other times, it’s more overt in open power plays. We’re seeing political figures use these dynamics to great effect on our world stage now. In organisations, they can quietly destabilise culture, performance, and trust.
Gilbert’s work offers a useful lens for this: are we creating systems that support ranking, threat, and fear - or ones that nurture fairness, belonging and contribution?
A Leadership Challenge
Leader-Member Exchange theory tells us that leaders naturally form different relationships with different people. But when those relationships start to split into “in” and “out” groups, because of preferential relationships it affects morale, performance, and trust.
It’s worth asking:
Do I give some people more access to me? More of my attention?
Who gets more information, support or stretch opportunities?
Do I allocate more resources or time to certain individuals?
If so, you may be reinforcing a culture where people compete for proximity to power, and that can undermine your leadership authority and create the conditions for less engagement and increased conflict.
Compassion as an Antidote
One way through this is compassion. It’s not soft; it’s strategic. Compassionate leadership recognises and responds to people’s emotional needs, creates psychological safety, and reinforces a sense of belonging. It values contributions and nurtures fairness.
It’s also a practical response to the “old brain” threats. When people feel safe, they perform better. When they feel part of something, they engage more. When they’re valued, they contribute more ideas.
If you’re in the outgroup, or coaching someone who is, there are also boundary skills to support resilience: naming what’s happening, stating needs clearly, staying focused, staying calm, and being open to negotiation. That self-confidence and clarity are essential when power dynamics get tricky.
Why This Is Hard
At the organisational level, this gets more complex. Cultures carry their own versions of in and out - from unspoken power structures to more systemic issues like racism or sexism. In many cases, these dynamics go unacknowledged because they’ve become part of the norm.
That’s why developing leaders who understand this, and can foster a culture of inclusion, is a long-term investment. Inclusion and wellbeing are essential for performance.
The Impact on Culture and Performance
Organisations that focus on compassion and inclusivity tend to see:
Higher engagement - people feel seen and valued
Better collaboration - there’s space for open dialogue
More innovation - because diverse voices get heard
Lower turnover - people stay where they feel they belong
In contrast, if your culture rewards superiority, allows marginalisation, or subtle bullying, you can expect the opposite: disengagement, politics, hidden agendas, low trust, high turnover and less creativity.
What to Do Next
Self-reflect – Who are you favouring?
Listen actively – Hear what’s not being said.
Widen inclusion – Broaden who’s in the room.
Invest in learning – Develop inclusive, compassionate leadership.
Model the tone – Make it clear: everyone’s in.
Build quality relationships – Protect, reciprocate, reassure, appreciate.
This is challenging work. In uncertain times, it’s tempting to default to old-brain leadership: tighten control, protect insiders, sideline dissent. But it’s inclusive, compassionate leadership that holds organisations together, especially in uncertain or high-pressure environments that are the norm now. If we don’t take this seriously, the “old brain” can run the show. And that’s rarely good for performance or for people.
If you would like help in navigating any of the dynamics mentioned in this blog, just drop me a line.