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Management, Emotions, and Decision Making

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In our endless quest to better manage companies, increase employee productivity, and improve business returns, we are constantly faced with decisions. What makes us good at making choices?

We’ve already begun to discuss this here on The Methodology Blog. For example, we noted the growing body of research that shows that surprisingly, managers are terrible at making judgements. That might be easily dismissed as “bosses aren’t as close to the work as employees” but it turns out that decisions are far more complex than this.

The critical factor is emotions. A great article from the Stanford Graduate School of Business notes:

A good decision is one in which the decision maker is happy with the decision and will stay committed to the decision…And that’s where emotions come in: They’re mental shortcuts that help us resolve trade-off conflicts and, unlike the vacillating Vulcans who can’t even decide between a pen or a wallet, happily commit to a decision. “When you feel a trade-off conflict, it just behooves you to focus on your gut.”

Management and Decision Making: Vulcans

© Flickr user Gage Skidmore

That’s the viewpoint of Professor Baba Shiv, an expert in decision science (and apparently a fan of the Star Trek movies and television shows.) His research goes on to explain how emotions sometimes make our ability to decide worse in ways that seem like they don’t make sense. Consider the following:

A series of studies found a strange price-placebo effect: When participants bought an energy drink at a discount, they actually performed worse on a puzzle-solving task than participants who had paid full price for the same drink. “It turns out you end up becoming dumber if you buy the product at a discount,” Shiv says. That’s an astounding result in itself, and it also suggests the possibility that drugs bought at a discount, such as drugs from Canada or generic versions of brand-name medications, might be less effective even when they’re otherwise identical. But what’s behind this effect? The answer, it turns out, is our unconscious belief equating low price with low quality–a belief that works even though we know on some level that it’s not always true. “So when you get a drink at a reduced price, global beliefs get involved without you being aware of it.”

Let’s restate that: we tend to believe that discounted items aren’t as good (“you get what you pay for”) and so when we buy stuff for cheap, our decision-making ability goes down the tubes.

Is it that simple? Do we need to take emotions out of all decision making? Not so fast. It turns out that the ability to have feelings actually ensures we can be decisive:

A few years ago, neuroscientist Antonio Damasio made a groundbreaking discovery. He studied people with damage in the part of the brain where emotions are generated. He found that they seemed normal, except that they were not able to feel emotions. But they all had something peculiar in common: they couldn’t make decisions. They could describe what they should be doing in logical terms, yet they found it very difficult to make even simple decisions, such as what to eat.

What does this mean for business managers trying to increase employee productivity or solve difficult problems? Be conscious of other’s emotions when making decisions. People are not purely logical creatures, and need feelings to make choices. But at the same time, be wary of any emotional content relating to the topic at hand. Sometimes we make bad decisions because we’re too emotionally involved–or because of unrelated anxiety.

In every case, getting one more opinion is more likely to help than hurt: especially if the person you’re asking has a different level of investment in the question under review. No matter what decision you’re trying to make, think carefully about how it will impact the feelings and the reality of every stakeholder.

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Robby Slaughter
Robby Slaughter is a workflow and productivity expert. He is a nationally known speaker on topics related to personal productivity, corporate efficiency and employee engagement. Robby is the founder of AccelaWork, a company which provides speakers and consultants to a wide variety of organizations, including Fortune 500 companies, regional non-profits, small businesses and individual entrepreneurs. Robby has written numerous articles for national magazines and has over one hundred published pieces. He is also the author of several books, including Failure: The Secret to Success. He has also been interviewed by international news outlets including the Wall Street Journal. Robby’s newest book is The Battle For Your Email Inbox.
Robby Slaughter

@robbyslaughter

Troublemaker and productivity/workflow expert. https://t.co/lJk8tIwe9q. Slightly more complex than 140 characters will permit.
Exhibit C: It was an option. It was even on the receipt. https://t.co/jgCabMuZdr - 5 days ago
Robby Slaughter
Robby Slaughter

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