Are You Making Good Decisions?

good decisionWhen I’m working with a client we will often talk about decision-making strategies and how to make better decisions. It is an important subject and a surprising one for many people.

For instance, did you know that as logical as you think you are when you make decisions, you mostly make decisions based on emotions?

If You Don’t Believe Me? Try This…

Make the best choice here.

  • Scenario One: You can choose between a free gift of $8 or $10.
  • Scenario Two: You can choose between a free gift of $8 (and a stranger will receive $8) or a gift of $10 (and a stranger will receive $12). Notice that the result is the same for you—in both scenarios you either get $8 or $10.

Which do people choose most of the time?

Well, as you might guess, in Scenario One, nearly everybody chooses the $10 option. However, in Scenario Two, there is a difference in what people choose.

Why would people choose to receive $8 instead of $10?

Alas, the answer is those pesky emotions sometimes make us settle on an illogical choice.

Experimenters* found that people who feel threatened or are concerned with their social status will often choose to receive $8 if the stranger will also receive $8 rather than receive $10 if the stranger will receive $12.

Here’s the bottom line: When people focus on security (an emotional need) they rely on “relative outcomes” ($10 to me, but $12 to a stranger) rather than “absolute outcomes” ($8 to me or $10 to me). Our decision-making brain is influenced that strongly by emotions. In the first case, people wanted to protect themselves from being assigned a lower rank. In the second, they were looking for the best and most positive overall result.

So What Should We Do?

Personally

Be aware of when we feel threatened and be careful about making decisions in that condition.
Try to focus on total value and overall growth.

As leaders and managers

Set an atmosphere of safety in the workplace so that coworkers and subordinates do not feel threatened and make bad decisions based on safety.
Be aware of you own feelings of insecurity and make decisions based more on growth and value rather than protection.

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*Jun Gu, Vanessa K. Bohns, Geoffrey J. Leonardelli. Regulatory focus and interdependent economic decision-making. Journal of Experimental Social Psychology, 2012; DOI: 10.1016/j.jesp.2012.11.008

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