Regardless of the industry you work in, the size of your organisation or how senior your role, the chances are that you are responsible for making decisions almost every day, in both your professional and personal life.
Whether we are aware of it or not, decision-making takes up a large proportion of our time and mental energy, and our brains can be working at a million miles an hour even when making a simple decision such as what we want to eat for breakfast in the morning.
Decision-making is a critical aspect of leadership, enabling leaders to set organisational direction, allocate resources effectively, and navigate uncertainty.
We recently hosted the first event in our Executive Education Insight Series, in partnership with the MBA/DBA Alumni Relations team, where we were delighted to be joined by Dr John McCormack, Senior Lecturer in Project Management at AMBS.
During the event, John delivered a fantastic session exploring the factors that impact our daily decision-making processes, unconscious and subconscious bias, how we use our instinct and rational to make everyday decisions, and the ways in which leaders can influence the decisions of their teams to enhance business efficiency.
Here are our key takeaways from this insightful discussion:
Rational vs intuition
Decision-making theory suggests that our brain makes decisions by using two different areas. The rational part of our brain spends time weighing up alternative solutions to different situations, searching for the best potential result.
Whilst making decisions using this part of the brain allows for thorough, consistent and in-depth exploration of possible outcomes, it is also thought to be a slow and labour-intensive method, and it can cause delays in decision-making in fast-paced environments.
Our intuition, the subconscious part of our brain which relies on our accumulated past experiences, heuristics, and mental shortcuts, is where the majority of the daily, mundane decisions are made using speed and efficiency. This style of decision-making uses a lot less energy, and allows for opportunities to be seized quickly, however, judgements tend to be clouded by emotional influence, inaccuracy, and bias.
John suggested that when these two parts of the brain work together in synergy, the likelihood of making the best possible solution increases.
Energy expenditure of making decisions
You may have heard of decision fatigue before, and there’s real evidence to suggest that decision making can hugely impact energy levels in the brain.
During the session, John explored the reasoning why many individuals who have high levels of decision-making responsibilities, decide to keep their decisions to a minimum in their personal life, such as wearing a similar combination of clothing every day, or eating the same breakfast, in order to reserve this energy, for making bigger, more important decisions in their professional capacity.
If you’re suffering from decision fatigue, why not see which areas of your life you could eliminate the need for decision-making from?
Predispositions and biases
A whole host of external factors can influence decision-making processes, but bias undoubtably plays a notable role.
Everyone sees the world through a different lens according to our upbringing, social experiences, and the environments we spend time in, but the key solution to tackling biases is to acknowledge that they exist.
By widening the diversity of people who are involved in decision-making processes, you can decrease the chances of making decisions based on unconscious bias.
We may sometimes feel like we have no control over how other people make decisions, but by analysing how the people around us tend to make choices, we can influence their choices by designing environments that could sway their decisions.
Choice architecture aims to help others choose the ‘right’ decision or nudges them to select the desired option of the architect.
By providing cues, positioning certain options as the easier or harder choice, or making indirect suggestions, we can influence the motives, incentives, and decision-making of groups of individuals effectively.
During the session, John said: “Managers are by necessity choice architects. Better choice architecture can result in more efficient and effective organisations.”
Does the optimal decision exist?
Many people identify themselves as perfectionists, and when it comes to decision-making, these people want to explore all avenues of possibility before eventually settling on the decision which seems optimal. But does the optimal decision exist?
John discussed the theory that human beings, are ultimately incapable of making the ‘optimal’ decisions, because of our limitations such as time, energy, knowledge, and ability.
Although the ‘optimal’ decision may be impossible to reach, following a set process can certainly support in your endeavours.
John shared the following process that can help to increase the effectiveness of decision-making: Identify the decision, gather relevant information, identify the alternatives, weigh the evidence, choose among alternatives, take action, review your decision and its consequences.
Overall, this interesting discussion provided valuable insights into the multifaceted nature of decision-making and the strategies we can all implement to increase the effectiveness of our choices.
Understanding and acknowledging the external and biological factors that effect how we make decisions is crucial to adopting strategies that help to mitigate bias, optimise our intuitive resources, and reserve our energy in both professional and personal settings.
Our next Executive Education Insight Series breakfast event will be taking place on Thursday 23 May where we will be joined by another insightful speaker. To receive the latest updates about this event, and other events taking place across Alliance Manchester Business School, sign up to our events mailing list.