What do emotions have to do with making decisions? Aren’t data, logic, and practical goals the most important factors in decisions—especially business decisions? Don’t well-structured decision-making processes prevent the undue influence of emotions? That’s what we like to think, but that’s not the way we actually work.

Why? Because all decisions involve risk. So while data, facts, and analysis are great contributors to the decision-making process, they are descriptors of the past. Decision making is about the future. Hence, it deals with uncertainty. Uncertainty, in turn, carries risk, and taking risk involves emotions.

Decision Making and Science

Research bears this out. For example, Daniel Kahneman (2002 Nobel Laureate in Economics) and the late Amos Tversky, conducted seminal research in the field. Some of their work highlights the role of fear in decision making. They learned, for example, that often we let our fear of low-probability, negative outcomes outweigh the potential for high-probability, positive outcomes when we make decisions.

Similarly, Neuroscientist Antonio Damasio made a fascinating discovery while studying people with damage in the part of the brain where emotions are generated. Damasio’s subjects had great difficulty making decisions. Though they could describe in logical terms what they should be doing, they found it very difficult to make even simple decisions, such as what to eat.

What science tells us, therefore, is that if you say to yourself or to your team, “Let’s leave our emotions at the door,” you are kidding yourself.

Decision-making Parameters: Deadline and Data

Two key factors affecting any decision are deadline and data. Front line leaders are often faced with urgent situations requiring fast decisions based on limited information. And as we know, limited information combined with limited time to assess that information increases risk.

As leaders progress along their career paths, decisions typically become more integrative and strategic in nature. The long-term impact that decisions will have justifies taking more time to gain a deep understanding of the situation, generate more options, and take more care to evaluate the pros and cons of each choice.

Some organizational cultures value quick decision making. Other cultures may reward thorough analysis and risk avoidance. Accommodating to a public style which differs from your hard-wired, private style may create stress—another emotional factor to recognize in decision making.

Bottom Line

Constantly changing global market conditions create the imperative to build a change-oriented corporate culture. This requires highly effective decision-making capabilities. Therefore, early awareness and understanding of risk and its emotional impact on decision making is critical to organizational effectiveness.

For more insights on the role of emotions in decision making, see Karl-Heinz’s Transform article, “What do Emotions have to do with Decision Making?

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