Business leaders who are growing their business are often faced with a (seemingly) never ending list of decisions.
- How do you keep in a positive frame of mind and not get overwhelmed?
- How do you know you are making the best decision each time?
Research has shown there are two phenomenon that have a very real impact on our decision-making capability. And it’s essential business leaders are aware of these two phenomenon so they can recognise the symptoms and adjust their thinking accordingly.
The impact of ‘psychic numbing’
Paul Slovic is a psychologist at the University of Oregon, and for over 50 years he’s been asking the question: Why does the world often ignore mass atrocities, mass suffering? His work has shown the human mind is not very good at thinking about, and empathizing with, millions or billions of individuals.
Psychic numbing: As the number of victims in a tragedy increases, our empathy, our willingness to help, reliably decreases. This happens even when the number of victims increases from one to two.Paul Slovic
A classic example of this effect is the value of $100. If you earn $200 per week and are given a bonus of $100 it seems like a large amount. However, if you earn $3,000 per week, the $100 bonus doesn’t seem so important. It’s still an extra $100, but compared to the larger total it feels like less.
Does the same effect occur when making decisions about your business?
If you are faced with many decisions to make, is it harder to take action because you feel like “What’s the point, even if I make one decision (or handle one issue) there are still so many other decisions to make”.
Are you tempted to postpone making that one decision because you don’t see it as being sufficiently valuable to complete against the backdrop of all the pressing decisions and issues you are facing?
The impact of ‘decision fatigue’
Other studies have shown the real impact of decision fatigue. This occurs when we are constantly making lots of decisions, whether large or small. For example, reviews of decisions made by judges has found that decisions made by the judges in the afternoon, after they have been working all day (making decisions), are of poorer quality than those they make earlier in the day.
For a business leader this can mean that making lots of ‘heavy’ decisions (ones requiring lots of consideration and trade-offs) can reduce your ability, and your motivation, to continue making decisions. And if you continue making decisions while being mentally depleted, it’s not unusual to find those decisions being of lower quality than you would otherwise make.
Which explains why some of our decisions made while in a mentally depleted state look irrational when we review them at a later time.
What should you do to make high quality decisions?
Firstly, it’s important to recognise that not all your decisions will be of equal quality. Give thought to when might be your best decision-making window.
- When will your mind be fresh enough?
- What time of day suits you best to make serious decisions?
Also, understand when you may be avoiding making an important decision. It’s easy to say you’re always “too busy” to get around to it. But is the psychic numbing effect causing you to downplay, or avoid, making decisions that you really should be addressing?
It might also be helpful to consider how you actually make decisions.
- Do you have a process that helps you take a balanced perspective?
- How do you know when you have sufficient information on which to base a decision?
- What active measures do you take to avoid the many inbuilt human biases each of us hold?
If you feel you would like to discuss how you can incorporate better decision making into your business, for you or your team, you’re welcome to contact us to explore suitable options.