Why do We make Bad Decisions?

Ever wondered where bad decisions come from, particularly when we’re entirely sensible most of the time? In business, why does weak management avoid difficult decisions, fail to deal with issues or uncomfortable challenges? Generally, what makes for bad leadership or even plain stupidity?

There are a number of reasons, all around how we think and in particular how stress plays a major role in that process. All bad decisions contain some element of stress. This article will explain some of the factors involved:

• Negativity
• Conflict 
• Judgements 
• Beliefs 
• Ego

Each and every one has an influence, just how much may surprise you. 

This article will helps you avoid unwanted outcomes, with the main message - any big decisions when stressed must be avoided at all costs!

To understand why this happens, we start with two basic functions of the brain-negativity and conflict.

Negativity

It is important to know that our brains have a negative bias; its key purpose is to ensure survival. Any threat must be remembered, so we can subsequently act on that perceived danger in the future. This defence mechanism ensures that all threats are assessed specifically against the highest potential for harm.

Because any level of perceived threat take us immediately into survival mode, we are effectively stressed at all levels of threat. Even when the threat is perceived and not real.

Milder aspects of this stressed condition include negative attitudes, fixed mindsets, a lack of positivity, complaints or general moaning. Moreover, stress makes us completely self centred and self-obsessed.

Conflict

David Eagleman’s ‘The Brain’ says that any decision is compromised by considerable conflict.

Indeed, the brain is a “machine built from conflict”. Even with a simple choice, a hurricane of activity occurs in distant parts of the brain as every potential and alternative is considered. Unlike a computer, the brain runs on conflict as a multitude of different possibilities are presented; all of which compete with each other.

These conflicts are ongoing. We argue with ourselves and not just one voice. Every different part of the brain has a voice. Although there is a single identity, we are not of a single mind as we are the collection of many competing drivers. To understand the conflict of choices can help with learning to make better decisions, for ourselves, businesses and society in general.

In essence, the negativity is for self defence and conflict assists the consideration of every possible threat.The brain processes information for decisions based on potential threats.

Once past negativity and conflict, the first filter of decision-making is:

Judgements

Emotions play a major part in judgements, particularly when they are strong or powerful. Aristotle knew that ‘feelings are conditions that cause us to change and alter our judgements’. Moods play a major role in how we judge people and evaluate arguments. Studies by Diane Mackie and Leila Worth confirm when one is in a good mood, but with limited time, the judgement is less on logic and more on the reputation of the main proponent or information source.

Interestingly, anxiety also plays a part, but in a rather counterintuitive manner. An anxious mood can promote bonding, even with strangers. This may have evolved from our ancestors joining forces in dangerous situations-classic safety in numbers.

Their research suggest two ways where judgment can influence complex decisions, either “slow and precise” or “quick and dirty”. Slow and precise employs logic, quick and dirty mainly emotion. Obviously, the more critical the decision, the more time one should take. 

Strong emotions can be amplified, particularly in a crowd which can ignore the single voice of reason. Classic ‘groupthink’, as defined by Janis, where the drive for consensus at any cost suppresses dissent or the appraisal of alternatives. Unscrupulous leaders and managers use this tactic to achieve their desired outcome.

Even so-called expert judgements can be flawed, particularly where complex information is present. Kahnemann in the totemic ‘Thinking Fast and Slow’, cautions about the potential inferiority of such experts because “humans are incorrigibly inconsistent in making summary judgements” and when asked to “evaluate the same information twice, frequently give different answers’!

In essence, whilst the ability to reason is one of evolution’s greatest marvels, Kahnemann points out the vulnerability to numerous biases will limit the accuracy of conclusions.

All judgments can be influenced, so what about the next decision filter?

Beliefs

What we believe may be considered the ultimate product of the conscious mind. However, to a large extent it is determined by operations in the brain outside conscious awareness. Hannah Critchlow’s revolutionary ‘The Science of Fate’ suggests many of these workings are not only cognitive bias, but also subject to genetic inheritance and biological constraints.

She also gives a fabulous explanation of how beliefs influence people, particularly in decision making. Beliefs stem from our unique consciousness and subjective view of the world that define our character, for good or bad. Early life experiences create beliefs that dictate how we interact with the world. Furthermore, the brain maintains those beliefs, regardless of evidence.

Part of this is explained by studies carried out by Dr Mario Beauregard, a cognitive neuroscientist, who confirmed the link between conscious beliefs systems and happiness levels. He found that when numerous brain networks become activated, the greatest concentration is in the reward pathways which consolidates the commitment to that particular belief.

In decision making, self interest can limit cognitive abilities. The vast number of personal beliefs provide a network of meaning for every single decision. They can lead to faulty predictions, as decisions are rationalised after the event, deliberately to suit our lives and environment. Equally, this heightened self-interest ensures we see what we want, rather than what is there.

The ultimate influence and arbiter of decisions is:

The Ego

Without question, all bad decisions, limits to potential and poor performance are down to the ‘Ego’. It features almost everywhere in all business failings, and usually emanates from the priority of the individual over the collective good.

Emergence of the ego in any context compromises performance and organisational learning. In very simple terms, the ego dictates of the needs of the individual over the team, with failure inevitably the consequence.

Perhaps the greatest modern-day expert on ego is Eckhart Tolle. His explanations of how to mitigate its limitations and harmful effects are without parallel. Ego means different things to different people. The most accurate description is a false self, that is created by an unconscious identification with the mind.

The ego only considers the past and future important, with little interest in the present moment. This fixation makes the mind completely dysfunctional, because it reverses the truth and reality of now.

It completely misconceives the present, because the ego’s only interpretation is through the past. As it is very insecure and vulnerable, constantly under threat; for protection, it creates elaborate defence mechanisms. This is always the case, even if the ego is outwardly very confident.

When threatened in any context or capacity, the only messages received are from the ego. The body’s reaction is an emotion. And what is the primary emotion from that continual bombardment? Fear, of course.

There can be no peace when the ego runs the mind, no fulfilment, other than fleetingly when a craving has been momentarily sated. Because the ego is derived from a sense of self, it has to identify with external things such as work, status, possessions, physical appearances and so on. 

It must be defended and fed constantly, which explains the inherent restlessness and drive for all forms of identification.The ego’s needs are endless, constantly based on fear and desire; but once we know how this basic dysfunction happens, there is no need to be ruled by the ego.

Saving Lives and Brexit 

Any threat injects stress into all decisions. The following two examples provide some context of these aspects have influenced decision making: the first personal and the second only too familiar to a weary country. 

Saving Lives

One of the most challenging times in my 13 years as a Fire Chief was dealing with the threat of strikes from the firefighter’s militant left-wing union. Some egos craved the reputation as the most hardline in the public sector.

Experienced countless fatalities in over 35 years’ service. The only really effective means to save lives from fires and road collisions is to stop them in the first place.

We were the first brigade to change the fire model from response to prevention, with no jobs lost. The reaction from the union was a strike ballot. Their main slogan ‘Cuts cost Lives’ is difficult to understand, when their strike action removes fire engines from protecting the community?

Sense prevailed eventually, we then instigated campaigns for domestic smoke alarm installations and an education initiative aimed at young drivers. Both resulted in massive reductions in fire and vehicle deaths. In fact, from nearly 30 annually when I joined the brigade, there was nearly a 3-year period without a single fire death. Working with other stakeholders of the police and local authorities, road deaths were reduced from 60-80 per annum to single figures within a few years.

Brexit

At the risk of alienating one half of the country and continuing the suffering of Brexit, it is not hard to see where negativity, conflict, judgement, beliefs and ego have influenced the eventual outcome.

Most of the initial arguments centred upon the negativity of the other sides position. Indeed, the various assertions in the referendum campaign were based almost entirely on threats; perhaps to induce some aspect of fear? 

That conflict of multiple choices compromised clarity and the ability to reason effectively. The conflict continued throughout the campaign and is still a major feature to this day.  

The absolute certainty of individual judgements was breathtaking, regardless of position. One can’t help wondering if compromise was or is possible?

Regardless of political persuasion, the Government and especially the Prime Minister’s strategy has been inept and witless. Self interest and self obsession to the fore. The result is a country more divided than ever in living memory.

With beliefs so reinforced, there’s not much cause for optimism as it seems ego is the primary driver of the polemic.

Perhaps the moot question is-has the resultant polarity and division done anything other than serve the egos of all involved?

It is difficult to see where reason will be applied to achieve unity and harmony to deliver an inclusive outcome. 

Hopefully, the lessons of my experience and the difficulties of Brexit will enhance your decision making.

Conclusion 

In conclusion, each of the factors outlined in this article have a detrimental effect on decision making when stressed in any capacity or context. The inevitable outcome will be a compromised, flawed or plain wrong decision. If you feel stressed at all, leave that key business or life decision till you feel more relaxed. You know it will make sense.