How we make decisions but why people can’t

Why We Make Decisions

What’s at Play 

Whether at home, work, or somewhere in-between there are constantly decisions to deal with or make. Ultimately, our decisions, or other people’s decisions, can significantly alter the course of everyone’s life involved, for good or bad.
What we’re focused on answering here is ‘How do people make decisions in organisations?’ and… why many key stakeholders often struggle to make decisions? Ultimately, we can think of decision making as a conscious process of making choices, from among alternatives, with the intention of moving towards some desired state of affairs
What decisions have you recently made that may have required critical evaluation?
I’ll leave you to contextualise many of the decision making related concepts that we discuss throughout this article, so it’s relatable to your professional or personal situation and experience.

Rational choice in decision making

We often assume that people should – and typically do – make decisions based on logic or rationality. This rational choice process is best  illustrated below and clearly demonstrates 6 steps to logical decision making.

Rational Choice Model
1. Identify a problem or opportunity

A problem being the gap between ‘what is’ and ‘how it should be’ and is usually something that needs to be corrected. While an opportunity is a deviation between current expectations and a potentially better situation. Either way you’re seeking improvement.

2. Choose the best decision process

Consider whether you have enough information or you need to involve others in the process. This will ultimately depend on the complexity of the issue and the skill set required to best solve it.

3. Develop a list of possible solutions

Initially consider ready-made solutions that have previously worked in a similar situation, and then design a custom-made solution or modify an existing one to solve the issue.

4. Choose from among alternatives (identified solutions)

This will usually depend on how much the alternative solution benefits or satisfies us, or those involved,  as decision maker (highest value or happiness). 

5. Implement the selected alternative (identified solution)

The rational choice is implemented to the problem or opportunity.

6. Evaluate the success of the solution

Has the gap narrowed between ‘what is’ and ‘how it should be’? Usually objectively measured.

The problem with this process

Realistically, we are not logical information processing machines. When we have vested interests for example, we tend to block out negative information in the process. We also have difficulty recognising problems and emotions greatly influence the decision-making process. This is in fact a glaring weakness with rational choice as both the rational and emotional brain centres alert us to problems and opportunities and influence our choice of alternative actions.

Emotions and making choices

Don’t be fooled, our brain very quickly attaches specific emotions to information about alternatives, and our decisions are strongly influenced by our initial emotional feedback.

In fact, information produced by logical analysis is layered with emotional feedback, which dually motivate us to choose or avoid a particular alternative. Ultimately though, emotions, not rational logic, energise us to make preferred choice.

Some real life examples

When in a negative mood we pay far more attention to details, possibly because the negative mood signals there’s something wrong.

When in a positive mood we pay less attention to details and rely on a more programmed approach to the decision. 

When we’re angry we rely on stereotypes and other shortcuts to speed up the choice process. It also makes us more optimistic about the success of risky alternatives.

When we’re fearful we are less optimistic about the outcomes of risky alternatives.

Whilst all of us use our emotions as information to some degree, a fact exploited by advertising companies, intuition also plays a key role in the decision making process.

Intuition and making choices

Intuition is effectively the ability to know when a problem or opportunity exists and to select the best course of action without conscious reasoning. Intuition is both an emotional experience and a rapid unconscious analytic process. Is it what we commonly referred to as ‘gut feeling’.

All gut feelings are emotional signals, but not all emotional signals are intuition. The key distinction is that intuition involves rapidly comparing what we see or otherwise sense with deeply held mental models learned through experience (eg: values and ideologies). Be mindful though that some gut feelings are not intuition because they are not based on well-grounded mental models. 

Do remember, whether the emotions we experience in a situation represent intuition or not depends largely on our previous experiences relating to that specific situation. We each essentially have mental and emotional roadmaps roadmaps to follow that speed up the decision-making process.

Making choices more effectively

We can’t get around the human limitations of making choices, but these strategies can help.

One thing to firstly consider is decisions tend to have a higher failure rate when we are decisive rather that contemplative about the available options. The ideal blend for making timely and good decisions is when systematic evaluation is accompanied by intuition and careful consideration.

Knowing how to minimise the adverse effects of emotions on the decision process. We need to be aware that decisions are influenced by both rational and emotional processes. Revisiting important problems and opportunities, in different moods or scenario planning, where you evaluate barriers in advance, better equips us to respond effectively with the desired respond in the case of a real emergency.

A great practical way to personally scenario plan is by completing a ‘Hope Map’.

What are the benefits of a team?

Focussing on the workplace, employee involvement potentially improves decision-making quality and commitment. Within a team, problems are recognised more quickly and they are defined more accurately. Never under-estimate your employees ability to identify when there is misalignment between customer expectations and your organisation’s activities.

By pooling knowledge, more and better solutions to problems and opportunities are enabled. Ultimately, by being included in decision making strengthens employee commitment, motivation, satisfaction and turnover. Therefore top-down decision making is no longer responsive enough to a dynamic organisational environment and employees must be actively involved in decisions.

How does your workplace stack up?

Whether your business has 50 or 2500 employees, it’s tricky getting the decision making process right. As you skilfully do, you’ll significantly minimise day-to-day operational disruptions and ensure optimal business profitability. 

Are you seeking an affordable, external solution that would best safeguard your business’ decision making performance?

How can we help you?

We work closely with workplaces to best safeguard their workforce’s performance. We aim to ensure your organisation is better prepared for, able to respond more skilfully to day-to-day operational problems and opportunities.

Contact us, join our community, or stay connected via e-mail or our socials (below on this page) to receive free resources and the latest in workplace trends.

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