S3-Ep21: Tools for Avoiding Disastrous Decisions

Guest: Dr. Gleb Tsipursky

Effective decision-making is one of the key skills for great leaders. Learning how to balance science-based approaches to decision-making and also leveraging experience and intuition form a strong foundation for leaders to improve how they make decisions and how they improve their decision-making process. During the discussion Gleb shares several key points from his research. He will share tips and an underlying foundation to enable you to improve your decision-making skills. • How do you use science-based strategies for avoiding disasters in business environments? • How do you appeal to the emotions of internal and external stakeholders in your business to maximize success? • How do you manage your own emotions to make wise decisions—neither taking undue risks nor failing to seize promising opportunities? • How do you combine intuitive and analytical thinking to make the best possible decisions in an environment of uncertainty?

 

Avoiding Decision Disasters: Integrating the Gut and the Head

This guest blog was written as a companion to the podcast interview with Dr. Gleb Tsipursky, Tools for Avoiding Disastrous Decisions. In the interview and the blog, Gleb explores how we can balance intuition and data-based decision-making to achieve the most effective business outcomes. He also explores some common misconceptions and offers recommendations for avoiding them.

Let’s say you’re interviewing a new applicant for a job, and you feel something is off. You can’t quite put your finger on it, but you’re a bit uncomfortable with this person. She says all the right things, her resume is great, and she’d be a perfect hire for this job – except your gut tells you otherwise.

Should you go with your gut?

In such situations, your default reaction should be to be suspicious of your gut. Research shows that interviewing job candidates is a poor indicator of future job performance.

Unfortunately, most employers tend to trust their guts over their heads and give jobs to people they like and perceive as part of their in-group rather than simply the most qualified applicant. In other situations, however, it makes sense to rely on gut instinct to decide.

Yet research on decision-making shows that most business leaders don’t know when to rely on their gut and when not to. While most studies have focused on executives and managers, research shows the same problem applies to doctors, therapists, and other professionals.

This is the challenge I encounter when I consult with companies on handling workplace relationships better. Research that I and others have conducted on decision-making offers clues on when we should – and shouldn’t – listen to our guts. Our gut reactions are rooted in the more primitive, emotional, and intuitive part of our brains that ensures survival in our ancestral environment. Tribal loyalty and immediate recognition of friend or foe were especially useful for thriving in that environment.

In modern society, however, our survival is much less at risk, and our gut is more likely to compel us to focus on the wrong information to make workplace and other decisions.

For example, is the job candidate mentioned above similar to your race, gender, or socioeconomic background? Even seemingly minor things like clothing choices, speaking style, and gesturing can significantly affect how you evaluate another person. According to research on nonverbal communication, we like people who mimic our tone, body movements, and word choices. Our guts automatically identify those people as belonging to our tribe and being friendly to us, raising their status in our eyes.

This quick, automatic reaction of our emotions represents the autopilot system of thinking, one of our brains' two systems of thinking. It makes good decisions most of the time but also regularly makes certain systematic thinking errors that scholars call cognitive biases.

The other thinking system, the intentional one, is deliberate and reflective. It takes effort to turn on, but it can catch and override the thinking errors committed by our autopilots. This way, we can address our brains' systematic mistakes in workplace relationships and other areas of life.

Remember that the autopilot and intentional systems are only simplifications of more complex processes and that there is debate about how they work in the scientific community. However, this systems-level approach is very useful for everyday life in helping us manage our thoughts, feelings, and behaviors.

Regarding tribal loyalty, our brains tend to fall for the thinking error known as the “halo effect,” which causes some characteristics we like and identify with to cast a positive “halo” on the rest of the person, and it's opposite the “horns effect,” in which one or two negative traits change how we view the whole. Psychologists call this “anchoring,” meaning we judge this person through the anchor of our initial impressions.

 

Overriding the gut

Now, let’s go back to our job interview example.

Say that the person went to the same college you did. You are more likely to hit it off. Yet, just because someone is similar to you does not mean she will do a good job. Likewise, just because someone is skilled at conveying friendliness does not mean she will do well at tasks that require technical skills rather than people skills.

The research is clear that our intuitions don’t always serve us well in making the best decisions (and, for a business person, bringing in the most profit). Scholars call intuition a troublesome decision tool that requires adjustments to function properly. Such reliance on intuition is especially harmful to workplace diversity and paves the path to bias in hiring, including in terms of race, disability, gender, and sex.

Despite the numerous studies showing that structured interventions are needed to overcome hiring bias, business leaders and HR personnel tend to over-rely on unstructured interviews and other intuitive decision-making practices. Due to the autopilot system’s overconfidence bias and a tendency to evaluate our decision-making abilities as better than they are, leaders often go with their guts on hires and other business decisions rather than use analytical decision-making tools that have demonstrably better outcomes.

A good fix is to use your intentional system to override your tribal sensibilities to make a more rational, less biased choice that will more likely result in the best hire. You could note ways in which the applicant is different from you – and give them “positive points” for it – or create structured interviews with standardized questions asked in the same order to every applicant.

So if your goal is to make the best decisions, avoid such emotional reasoning, a mental process in which you conclude that what you feel is true, regardless of the actual reality.

 

When your gut may be right

Let’s take a different situation. Say you’ve known someone in your work for many years, collaborated with her on various projects, and have an established relationship. You already have stable feelings about that person and have a good baseline.

Imagine yourself having a conversation with her about a potential collaboration. For some reason, you feel less comfortable than usual. It’s not you – you’re in a good mood, well-rested, feeling fine. You’re unsure why you feel bad about the interaction since nothing is wrong. What’s going on?

Most likely, your intuitions pick up subtle cues about something being off. Perhaps that person is squinting and not looking you in the eye or smiling less than usual. Our guts are good at picking up such signals, as they are fine-tuned to pick up signs of being excluded from the tribe.

Maybe it’s nothing. Maybe that person has a bad day or didn’t get enough sleep the night before. However, that person may also be trying to pull the wool over your eyes. When people lie, they behave in ways that are similar to other indicators of discomfort, anxiety, and rejection, and it’s really hard to tell what’s causing these signals.

Overall, this is a good time to consider your gut reaction and be more suspicious than usual.

The gut is vital in decision-making to help us notice when something is amiss. Yet, in most situations, when we face significant decisions about workplace relationships, we need to trust our heads more than our gut to make the best decisions.