How to make better decisions…

Management & Growth, Videos,

Do you understand the science behind making decisions? Why our emotions can be so influential? How can we circumvent the natural wiring in our brains?

Watch this to find out!

Transcript:

Hi and welcome to another episode of BaranovTV designed to demystify the world of accounts and tax and to help your business grow.

I wanted to talk to you today about an article that I saw in the magazine that comes out from the ACCA, our governing body.

It talked about decision making and the fact that as professional people and business owners we can make up to 30,000 decisions every day.

They could be tiny things, like whether I’m going to get out of bed or not, whether I’m going to have tea or coffee or whether I’m going to keep that member of staff on or whether it’s time to part company.

So obviously, it’s a massive range of circumstances, but the thrust of the article was talking about the things that influence our decision making. There are things that we’re totally oblivious to, but that can make a big difference to our decision making if we become aware of them.

So what am I talking about?

Let me explain.

We think that all of our decisions are based on logic and the rules and considered thought.

But actually the initial process or the initial part of the brain that considers our first thoughts about decision making are emotion based.

And the reason for that is because it needs to consider whether we need to apply ‘fight or flight’, so whether it’s a life changing decision or not. As a result of that, that part of the brain can actually continue to exert influence on that part of our decision making.

It can actually be an emotionally-based decision and we get hijacked; our logical thought is gone!

Emotion affects our decision, and that effect is actually heightened for more complex decisions.

And it gets worse!

We worsen that emotional effect because our brain goes through a natural process of post-rationalization, which means that we may make an emotional decision or an emotionally influenced decision, but we then apply logic to it, to rationalize it.

We say, ‘well actually this and this and this applied so that makes sense’.

We also make decisions based on our own belief systems and our own values rather than based on the particular set of circumstances that we’re trying to base the decision upon.

So, for me it sprung to mind, and this is a trivial example, but as a child I was very scared of one particular German Shepherd dog. When I see them my gut reaction is always put my hands in my pockets and kind of shy away from them.

I’m judging every other German Shepherd dog on this one from when I was about six or seven!

We do that generally on all sorts of things.

It could be that we meet somebody or we’re interviewing somebody and we know that first impressions count. But that’s because the flip side of it, is that people judge base very, very quickly. That’s what we’re doing, we’re using these preconceptions and assumptions to make decisions about new circumstances and new people.

We also have something called ‘confirmation bias’ that worsens our preconceptions.

What this does, is look for evidence that supports our preconceptions and disregards and discounts evidence that would support an alternate view.

Subconsciously we’re making emotional decisions, which we’re rationalizing, and then we’re making those decisions based on our own bias, and then we’re strengthening those biases.

We need to work hard to make sure that we try and get hold of this and start to understand, remeasure and recalibrate our decision making process.

Within the article from the ACCA magazine there were various recommendations on there.

  • One is to develop a better understanding of our own emotions to enable us to recognize when others are making emotional decisions around us as well. It means that we can make better quality decisions ourselves but also make sure that those around us, so potentially in our team, are making better quality decisions too.
  • It also recommended self-reflection. That sounds very ‘new age’ but actually what they’re saying is to try and make sure that we become more aware of when we are making an emotionally influenced decision, not necessarily a knee jerk emotional decision, but just try and take that emotion out of decisions and develop a more objective view of your own process, your decisions and your behaviors.
  • Try and get feedback from those around you as to what they think and what their thoughts are as to how you’re making those decisions. Particularly on the big decisions, for example if you’re thinking about the future of a member of your team, think about and try and get some feedback from other people to make sure that you’re not basing that on too much emotion or on too many preconceptions.
  • The article made the point that there isn’t necessarily just one right decision. It could be that there’s more than one decision that would work and they made the point that when you bring people into the decision making process and it’s around people that can complicate matters a lot more. There may well be multiple options and so to try and make sure that you consider all of those within the decision making process.
  • And finally their main point, the main suggestion, was to try and challenge your preconceptions and your values and beliefs. Now we should all be trying to do that anyway to try and broaden our horizons, but some of them are very, very ingrained.

    If you’ve been in a particular environment throughout your upbringing or you’ve been in a very unaccepting environment, then you can tend to be much more closed to new experiences and new people and have a lot more of those preconceptions that will influence your decisions.

 

So, that was a whistle-stop tour of an article that I thought was fascinating. As I say we’re all making up to 30,000 decisions every day and some of them are really big.

If we can help by acting as a sounding board for any of those decisions then please do get in touch, that’s one of the things we’re here for. Otherwise I’ll see you all very soon.

 

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