It is easy to write about the complexity in the business environment and how that has an impact on decision making. Several economic and business researchers have argued that the pace of business has been increasing in speed and complexity since the late 80s and early 90s. This complexity and quickened pace may speed up the decision making process to some extent and produce circumstances where rational thought is not enough.
Call it intuition, a gut feeling, educational guesses or what have you but this is adding emotion to the decision making process. With complexity being the norm, it highlights why decision making needs both emotion and logic.
Making that decision
Consider this…you and your team are evaluating a new customer relationship management system. The old way works but it is missing something that you need to keep track of new and old customers. How are you framing the decision? The words you use and the method of communicating (spoken in-person, video, email, etc.) create opportunities for you and each member of your team to interpret the message based on emotion, cognitive biases and shortcuts in thinking.
We are all prone to this. The way we feel about the information, people involved and even unrelated issues affects how a choice is made. But before the decision is made, the areas of communication and preparation are excellent opportunities to notice the emotional aspects.
Communication: This is a crucial part of both uncovering and managing the emotions triggered by what is at stake in the decision, who is involved and anticipated outcomes. Engaging in both group and individual conversations gives both the CEO-type person and his/her team a chance to listen to the concerns, hopes and provide explanations.
Preparation: Developing a business plan allows the leader and the team to identify benchmarks, goals and obstacles. Using a lean business plan template or a living business plan template provides a greater focus for keeping emotions from sidetracking the decision process.
While this is a simple overview, the decisions embedded in communication and preparation depend on how the emotions are managed. Some leaders may choose certain methods or actions based on their comfort level and that is most definitely a subjective decision.
A little background
According to Paul Joyce and Adrian Woods, many companies continue to use rigid and time consuming decision-making strategies. Some of the obstacles in timely decision-making center on how many people are involved, the roles of each of these people and the person designated as primary decision-maker. As small companies grow, it becomes more and more unwieldy for the CEO-type person to make all of the decisions. Despite this, it is typical for the leader of the small organization to continue heavy involvement with most decisions.
Also for many business leaders, there is a lack of recognition that emotions play a central role. Over the last 20 years, both researchers in psychology and neuroscience have discovered that we use more than one part of our brains in decision making. It is interesting to note that our brains tend to follow well-developed pathways (some say our brains are lazy) so it is easy to have emotional triggers and cognitive biases skew how we understand and use information.
We even have a belief that business decision-makers must be more logical and analytical than emotional and intuitive. Yet if we follow the research, it is clear that both logic and emotions are necessary for effective decision making.
Where emotions (could) butt in
While emotions are quite often information, they can also become untruths and skew our ability to process data. There are potential pitfalls to watch out for:
- Seeking a magic wand or silver bullet – Whether restructuring or simply trying to head off a downturn, it can be tempting to try to find the magical cure-all. The business environment and, indeed, the organization itself is complex and multilayered. Bad decisions can result from seeking one way to handle the whole.
- Feeling overwhelmed by information – Whether your company is looking at a new market or trying to get a handle on the current business environment, it is tempting to avoid doing SWOT or PESTEL analyses because there is too much information to process. A decision could be based on the faulty or missing data.
- Avoiding involving certain people because they challenge your perspective – It is more soothing to surround ourselves with like-minded people. Yet, your decisions could suffer because you would rather avoid someone who is cantankerous, negative or arrogant.
- The “cool” factor – Changing the company by adding staff, pursuing a higher-level customer or creating more sophisticated policies and procedures are both exciting and threatening.Some decisions could be based on how alluring the potential solution is rather than seeing if it fits with the business goals and culture of the organization.
- Need for control – Some leaders will make safer decisions or no decisions so they can avoid trusting their teams and feeling uncertain or afraid. Publicly supporting the change plan while actually slowing down or stopping adoption of the new way of doing things is a way of feeding the need for control.
Necessary pairing
Decision making is such a key part of being CEO (whether you have the title or not) and it is not simply a function of logic. In fact, it would be a loss if we tried to be exclusively rational. There are even times when a decision is a good choice but there is a prevailing emotional tone that stops everything. It is time to end the misperception that business leaders must make decisions from a logic-only mindset. Use all of yourself (and your team) and take advantage of the partnership between emotions and logic.
Images: ”making decisions make choice choose direction yes or no decide initiative red word built by ants/ Shutterstock.com“
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