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Decisions, decisions!

It’s claimed that one of the best business decisions Apple ever made was at the end of 1996, when the board hired Steve Jobs as CEO a decade after firing him. The company’s revenue went from $7 billion to $216 billion by 2016. Granted, our working day probably doesn’t involve decisions quite this consequential, but it is, nonetheless, filled with choices, such as selecting candidates for an interview, optimising our brand’s social media presence or developing a pitch for a potential client. Making choices is an exceptionally complex process that can be influenced by a huge array of factors. Here, we’ll review how decision-making interacts with three themes: mood, burnout, and strategic thinking.

Mood and the double-edged sword

Researchers explored the effect of mood on proscriptive (harmful) and prescriptive (desirable) decisions. Their motivation for studying this relationship was that the increasingly interconnected nature of the business world generates ambiguity with regards to the best course of action in certain situations. This is exacerbated for organisations with a weak ethical structure or poorly established role expectations. Under such circumstances, mood is more likely to subconsciously “infuse our cognitive assessments of a problem”. Specifically, the authors argue that when managers are in a positive mood, they are more likely to make desirable and harmful decisions, because they simultaneously overestimate the positive consequences and underestimate the negative consequences. However this is a double-edged sword. Managers who are in a bad mood are less likely to make harmful decisions, because they predict negative outcomes are more likely, but also avoid desirable decisions, as they believe the chance of positive outcomes is lower. Given that unethical behaviour occurs more often due to faulty decisions than ill intentions, research leads claim it is important that managers are aware that an “unexpected mood bias” can impact decision-making in ambiguous situations.

Burnout = risky + avoidant decision-making

A highly prevalent issue in the workplace is burnout, which is characterized by cynicism, exhaustion, and low confidence in one’s abilities to do the job (professional inefficacy). In one recent study, it was found that all three symptoms of burnout, particularly exhaustion, increased avoidant decision-making, and reduced rational decision-making. Results also revealed that those with professional inefficacy take riskier decisions because they undervalued the seriousness of the consequences. It is argued that this is because the person does not feel that they can take control of the situation, so they are not motivated to make a considered decision. If we combine the burnout epidemic with the fact that we make many small and large-scale decisions at work, there is high potential for poor decision-making. This may not only negatively impact the organisation’s business goals but, crucially, the emotional wellbeing of its employees. The authors therefore suggest that managers create environments that provide suitable support for employees who are responsible for decision-making tasks. For example, decisions are more difficult when there are more choices available and at the end of the day due to cognitive fatigue. By recognising what situations hinder the decision-making process of a vulnerable employee, managers can help prevent their burnout symptoms from worsening, and protect the interests of the organisation.

Intuition vs. rationality: Reaching a compromise

No doubt we’ve all come across people in the workplace who have a very clear and consistent decision-making style. They may be very creative, trust their gut and rely on emotional associations. Or, perhaps they opt for a logical, analytical approach that is grounded in concrete information. All of us lie somewhere on the continuum, but what happens when these two styles come together? Tension. This paradox is a problem when it comes to strategic decision-making, which is defined as the process of reaching long-term goals. A team of researchers used 7 case studies to derive a 3-step solution to managing this tension between rational and intuitive decision-making styles. If you’re working with others towards a long-term goal, here are some tips to avoid conflict:

  1. Prepare the ground by experiencing both ways of thinking, and accept the presence of its contradictory nature. For example, people who prefer rationality could attend a creative workshop that emphasizes an intuitive decision-making style. Grounding is another technique, which encourages decision-makers to notice the rational elements of an intuitive approach.  
  2. Develop the outcome by integrating elements of both rationality and intuition. For example, visualization allows rational thinkers to collect and organise complex information, but also helps intuitive thinkers make new innovative connections by triggering affective reactions. This allows rational thinkers to fulfill the cognitive criteria, like commercial goals, and intuitive thinkers to satisfy their criteria, such as incorporating ‘feel good’ and ‘likeability’ factors into the strategy.
  3. Embed the outcome by fostering commitment to paradoxical thinking. For example, intuitive thinkers are guided by their subconscious, which may lead rational thinkers to believe that there is not a clear cause and effect behind their decisions. At the end of the strategic decision-making process, it is important to translate the outcome into the rational language; it means that both thinkers will have confidence in the paradoxical style of thinking.