We all know how stressful the demands placed on us in the fast-paced world we live in can be, especially when it comes to making decisions. Despite this, our brains are still pretty much the same as they have been for over 30,000 years: the amount of time since we lived in caves has been like the length of a tea break in evolutionary terms. There’s no new version in sight, yet people are expected to make smarter and faster decisions.
This presents major challenges in the business world. But there are straightforward ways to make better decisions more quickly by simply understanding more about how we function and using that awareness.
DECISIONS THAT MATTER
When making daily decisions, ensure you stay focused on those that carry the greatest value for you and your business. Bear in mind that decisions are not distributed evenly.
You may have heard it before, but a good rule of thumb is that around 20 per cent of the decisions we make generate about 80 per cent of the return. You can’t always make the best decisions, so save your energy for the most important ones.
CLARIFY YOUR DECISION
If you’re unsure which decisions do carry more weight, take some time to clarify each one carefully. A simple yet effective method is to make the what, how and why of a given decision explicit: what is it about your decision that’s important? How will you go about making your decision? And why should or shouldn’t you make a particular choice? Using a structured approach will not only improve your work process and make it more effective, but you will also force yourself to reason explicitly.
According to the dual process theory, first developed by psychologist William James and built upon throughout the twentieth century, your brain can be thought of as two distinct systems for making decisions: one that is more primitive and emotional, and another that is more advanced and rational.
It’s important to remember that your emotional system is much faster and makes most of your decisions. Your more advanced system is slower, gets tired easily and doesn’t work well when your state of brain falls into one of the HALT (hungry, angry, lonely, tired) categories. If you want to be more rational, be honest and refrain from making decisions when “in HALT”.
In a world of data overload, many of us have become addicted to information. It is a human trait to dislike uncertainty, but we need to accept that the world we live in today is full of it. You can’t eliminate uncertainty by merely collecting more information – it will only distract from the task in hand and serve to confirm biases. It’s worth taking a step back and being choosier when information gathering. Half as much information is often twice as good.
BEWARE OF GROUPTHINK
We all have to make decisions as a group in the workplace. However, if the members of a team are too homogenous, there’s a risk that a decision will be made too quickly or without sufficient critique.
Irving Janis was the first psychologist to look at groupthink, back in the 1970s. He used the Bay of Pigs invasion to highlight how some of the most expert people can make poor decisions in a suboptimal setting: the Kennedy White House accepted plans the CIA had formulated with Eisenhower’s administration without question. The same assessment was made of BA and M&S’s attempts at global expansion in the 1990s: both darlings of the London Stock Exchange, they underestimated the risk that potential failure triggers held, with board members reinforcing each other’s sense of invulnerability.
It’s important that group members complement each other (if two people are thinking alike, then there is one too many there) with regard to background, knowledge and ways of reasoning, in order to make more objective and better decisions.